Intel Corporation 2200 Mission College Boulevard

Transcription

Intel Corporation
2200 Mission College Boulevard
Santa Clara, Californie 95054, U.S.A.
PLAN D’ACHAT D’ACTIONS 2006 D’INTEL CORPORATION,
TEL QUE MODIFIE ET REFORMULE
(LE « PLAN D’ACHAT D’ACTIONS »)
PLAN D’INTERESSEMENT D’INTEL IRELAND
ET PLAN D’INTERESSEMENT D'INTEL SHANNON
(LES « PLANS IRLANDAIS »)
Prospectus destiné aux salariés des filiales de l’Espace Economique Européen (l’« EEE »)
d’Intel Corporation, sous réserve de la législation nationale en vigueur dans chaque Etat
RESUME DU PROSPECTUS
TRADUCTION EN FRANCAIS DU RESUME DU PROSPECTUS
°
VISE PAR L’AUTORITE DES MARCHES FINANCIERS LE 17 JUIN 2016 SOUS LE N 16-262
En application des articles L. 412-1 et L. 621-8 du Code monétaire et financier et de son règlement
général, notamment des articles 211-1 à 216-1, l’Autorité des marchés financiers a apposé le visa
n° 16-262 en date du 17 juin 2016 sur le présent prospectus. Ce prospectus a été établi par
l’émetteur et engage la responsabilité de ses signataires. Le visa, conformément aux dispositions
de l’article L. 621-8-1 I du Code monétaire et financier, a été attribué après que l’AMF a vérifié si le
document est complet et compréhensible, et si les informations qu’il contient sont cohérentes. Il
n’implique ni approbation de l’opportunité de l’opération ni authentification des éléments
comptables et financiers présentés.
Ce prospectus sera mis à la disposition des salariés des filiales d’Intel Corporation, sous forme imprimée,
aux sièges sociaux respectifs des filiales, dans les pays de l'EEE dans lesquels les offres dans le cadre
des plans mentionnés ci-dessus sont considérées comme étant des offres au public, sous réserve de la
législation en vigueur dans chaque Etat. En outre, le prospectus ainsi que, le cas échéant, les
traductions de son résumé seront mis à leur disposition sur les intranets d’Intel Corporation, Altera
Corporation et Wind River Systems, Inc. et des exemplaires gratuits leur seront fournis sur simple
demande en contactant le département des Ressources Humaines de leur employeur. Le présent
prospectus et la traduction en français de son résumé seront également disponibles sur le site internet de
l’AMF, www.amf-france.org
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TABLE DES MATIERES
Page
PARTIE I — RESUME DU PROSPECTUS ..................................................................................................................3
SECTION A — INTRODUCTION ET AVERTISSEMENTS ............................................................................3
SECTION B — EMETTEUR ...........................................................................................................................3
SECTION C — VALEURS MOBILIERES ..................................................................................................... 10
SECTION D — RISQUES............................................................................................................................. 12
SECTION E — OFFRE ................................................................................................................................. 13
2
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PARTIE I — RESUME DU PROSPECTUS
VISA AMF N° 16-262 EN DATE DU 17 JUIN 2016
Les résumés sont constitués d'informations requises désignées ci-après « Eléments ». Ces Eléments
sont numérotés dans les Sections A - E (A.1 - E.7).
Ce résumé contient tous les Eléments dont l'inclusion est requise dans un résumé pour ce type de
valeurs mobilières et d'Emetteur. Tous les Eléments ne devant pas être renseignés, la numérotation des
Eléments dans le présent résumé peut ne pas être continue.
Même si un Elément peut être requis dans le résumé en raison du type de valeurs mobilières et
d’Emetteur, il est possible qu'aucune information pertinente ne puisse être donnée quant à l'Elément.
Dans ce cas, une courte description de l'Elément est incluse dans le résumé avec la mention « Sans
objet ».
SECTION A — INTRODUCTION ET AVERTISSEMENTS
A.1
Avertissement au
lecteur
Le présent résumé doit être lu comme une introduction au prospectus.
Toute décision d’investir dans les valeurs mobilières qui font l’objet de
l'offre au public doit être fondée sur un examen exhaustif du prospectus.
Lorsqu’une action concernant l’information contenue dans le prospectus
est intentée devant un tribunal, l’investisseur plaignant peut, selon la
législation nationale des États membres de l'Union européenne ou parties
à l’accord sur l’EEE, avoir à supporter les frais de traduction du
prospectus avant le début de la procédure judiciaire. Seules les
personnes qui ont présenté le résumé, y compris le cas échéant sa
traduction, engagent leur responsabilité civile, mais uniquement si le
contenu du résumé est trompeur, inexact ou contradictoire par rapport aux
autres parties du prospectus, ou s’il ne fournit pas, lu en combinaison
avec les autres parties du prospectus, les informations essentielles
permettant d’aider les investisseurs lorsqu’ils envisagent d’investir dans
ces valeurs mobilières.
A.2
Consentement à
l'utilisation du
prospectus
Sans objet. Il n'y a pas de revente ultérieure de valeurs mobilières ou de
placement final par des intermédiaires financiers.
SECTION B — EMETTEUR
B.1
Raison sociale et
nom commercial
de l'émetteur
Intel Corporation (« Intel » ou la « Société »).
3
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B.2
Siège social et
forme juridique
d'Intel, législation
applicable et pays
d'origine
Le siège social d'Intel se situe au 2200 Mission College Boulevard, Santa
Clara, Californie 95054, U.S.A. Intel est une société anonyme relevant du
droit de l'Etat du Delaware, U.S.A.
B.3
Description de la
nature des
opérations
actuelles d'Intel et
de ses principales
activités
Intel est un leader dans la conception et production des plate-formes de
technologies numériques intégrées évoluées. Une plate-forme est
composée d’un microprocesseur et d’une puce, et peut être améliorée
par du matériel informatique, des logiciels et des services
supplémentaires. Intel vend principalement ses plate-formes à des
fabricants de matériel informatique d’origine (« OEMs »), des fabricants
1
de concepts d’origine (« ODMs ») et des fabricants d’équipements
industriels et de communications dans les industries informatiques et de
communications. Les plate-formes d’Intel sont utilisées dans l'espace
informatique dans le cadre des ordinateurs portables notebooks (y
compris les dispositifs Ultrabook™), des systèmes 2 en 1, des
ordinateurs de bureau, des serveurs, des tablettes, des téléphones, de
l'Internet des Objets (y compris la technologie portable, les dispositifs
utilisés dans le commerce de détail et dans la production). Intel
développe et vend également des logiciels ciblant principalement
l’intégration de la sécurité et de la technologie.
Le chiffre d’affaires net pour les trois exercices clos au 26 décembre
2015, 27 décembre 2014 et 28 décembre 2013 était le suivant :
Exercices clos au
26 déc.
2015
(En millions)
27 déc.
2014
28 déc.
2013
Chiffre d'affaires net
Groupe Informatique Client (« CCG »)
$ 32 219
Groupe Centre de Données (« DCG »)
15 977
14 387
12 163
Groupe Internet des Objets (« IOTG »)
2 298
2 142
1 801
Divisions logiciel et services (« SSG »)
2 167
2 216
2 188
Autres
2 694
2 253
1 911
Chiffre d’affaires total
$ 55 355
$ 34 872 $ 34 645
$ 55 870 $ 52 708
Durant le premier trimestre de l'exercice fiscal 2016, Intel a modifié la
présentation de ses résultats financiers afin de refléter les modifications
de
certains
secteurs
d'activités
(la
« Nouvelle
Structure
Organisationnelle »). Intel a créé le Groupe Solutions Programmables
(« PSG ») à la suite de son acquisition d'Altera Corporation (« Altera »).
En outre, Intel a créé le Groupe Nouvelle Technologie (« NTG »), qui
comprend des produits conçus pour la technologie protable, les appareils
photographiques et autres secteurs d'activités du marché (y compris les
drônes), et a déterminé que SSG n'est plus un secteur d'activites. Enfin,
Intel a choisi de communiquer séparément les résultats opérationnels du
Groupe des Solutions de Mémoire Non-Volatile (« NSG »), le Groupe
Sécurité d'Intel (« ISecG ») et PSG.
1
Pour information, un fabricant de concepts d'origine (original design manufacturer) est une entreprise qui fabrique un produit
qui portera la marque d'une autre entreprise lors de sa vente.
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4
Les secteurs opérationnels d'Intel en vigueur au 2 avril 2016 étaient les
suivants :
• CCG: comprend des plate-formes conçues pour les ordinateurs
portables notebooks (y compris les dispositifs Ultrabook™), les
systèmes 2 en 1, les ordinateurs de bureau (y compris les ordinateurs
personnels (« PCs ») tout-en-un et haut de gamme), les tablettes et
les téléphones ; les produits de connexion câblés ou sans fil ; ainsi
que les éléments de communication mobile.
• DCG: comprend les plate-formes conçues pour les infrastructures
d'entreprises, dans les nuages (cloud) et de communications, et les
secteurs d'informatique technique.
• IOTG: comprend les plate-formes conçues pour les secteurs de
marchés Internet des Objets, y compris le commerce de détail, le
transport, l'industriel, les immeubles et maisons d'habitation, ainsi
qu'une large gamme d'autres secteurs de marché.
• NSG: comprend les produits de mémoire rapide NAND principalement
utilisés dans les disques à circuits intégrés.
• ISecG: comprend les produits logiciels relatifs à la sécurité afin de
fournir des solutions innovantes qui protègent les ordinateurs, les
dispositifs mobiles et les réseaux à travers le monde contre les
dernières menaces de logiciels malveillants et les nouvelles menaces
en ligne.
• PSG: comprend les semi-conducteurs programmables (principalement
système programmable de portes logiques) et les produits y afférents,
y compris dans le domaine de la communication, du réseau et
stockage, de l'industrie, militaire et de l'automobile.
• Autres comprend le chiffre d'affaires, les frais et dépenses, tel que :
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o
le résultat opérationnel provenant du NTG d'Intel ;
o
les montants compris dans le cadre des charges de restructuration
et de dépréciation ;
o
une partie des avantages sociaux, de la rémunération et autres
frais non alloués aux secteurs opérationnels ;
o
les activités cédées pour lesquelles une part discrétionnaire du
résultat opérationnel n'est pas régulièrement prise en compte par
le Directeur de l'exploitation (Chief Operating Decision Maker) ;
o
le résultat opérationnel des activités naissantes qui supportent les
initiatives d'Intel, y compris ses activités de fondeur ; et
o
les frais d'acquisition, y compris les amortissements et
dépréciations des écarts d'acquisition et des actifs incorporels liés
aux acquisitions.
5
Le chiffre d’affaires net pour les trimestres arrêtés les 2 avril 2016 et 28
mars 2015 était le suivant :
Trimestres arrêtés le
2 avril
2016
(En millions)
Chiffre d'affaires net
CCG
DCG
IOTG
NSG
ISecG
PSG
Autres
Chiffre d'affaires total
28 mars,
2015
$
7 549
3 999
651
557
537
359
50
$
7 420
3 681
533
592
479
—
76
$
13 702
$
12 781
Tous les montants des exercices antérieurs ont été ajustés
rétrospectivement afin de refléter la façon dont Intel gère en et contrôle
en interne les performances de ses secteurs d'activités à partir de
l'exercice fiscal 2016 et comprennent d'autres restructurations mineures.
B.4a
Tendances
récentes
Le 19 avril 2016, Intel a annoncé, sur la base des principes comptables
généralement admis aux Etats-Unis d’Amérique (« US GAAP »), un
chiffre d’affaires net au titre du premier trimestre de 13,7 milliards d’US
dollars, un résultat opérationnel de 2,6 milliards d’US dollars, un résultat
net de 2,0 milliards d’US dollars et un résultat par action ordinaire dilué
de 0,42 US dollars. Les opérations d’Intel ont généré environ 4,0 milliards
d’US dollars de trésorerie, Intel a payé 1,2 milliard d’US dollars de
dividendes et utilisé 793 millions d’US dollars afin de racheter 27 millions
actions ordinaires d'Intel d'une valeur nominale de 0,001 d'US dollars (les
« Actions »).
Le 2 mai 2016, Intel a déposé auprès de la SEC son Rapport Trimestriel
sur « Form 10-Q » pour le trimestre clos au 2 avril 2016 (le « Form 10-Q
d'Intel »), dans lequel le montant de la trésorerie a été ajusté à 4,1
milliards d'US dollars.
Le même jour, Intel a annoncé un plan de succession pour le directeur
financier. Le directeur financier actuel, Stacy J. Smith, assumera un
nouveau rôle au sein de la Société, gérant les ventes, la production et les
opérations une fois que son successeur sera opérationnel. La Société a
débuté un processus de recherche formel pour le nouveau directeur
financier qui prendra en compte des candidats internes et externes.
Monsieur Smith restera dédié à son rôle et ses obligations en tant que
directeur financier durant le processus de recherche et de transition.
Le même jour, concomitamment à la fin du premier trimestre de 2016,
Intel a annoncé un Plan de Restructuration 2016, conçu afin d'aligner ses
opérations avec les besoins en évolution de ses activités et d'améliorer
l'efficacité. Au terme de ce programme, Intel a l'intention de fermer
certains sites et de réduire jusqu’à douze mille positions à travers le
monde. En conséquence, Intel prévoit d'encourir des frais d'environ 1,2
milliard d'US dollars durant le deuxième trimestre de 2016. Il est prévu
que les actions relatives à ce programme soient totalement finalisées
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6
pour le deuxième trimestre de 2017.
Le 19 mai 2016, concomitamment à la fin du premier trimestre de 2016,
Intel a émis des Obligations Senior à 1,700 % pour un montant en
principal global de 500 millions d'US dollars venant à échéance en 2021
(les « Obligations 2021 »), des Obligations Senior à 2,600 % pour un
montant en principal global de 1 milliard d'US dollars venant à échéance
en 2026 (les « Obligations 2026 ») et des Obligations Senior à 4,100 %
pour un montant en principal global de 1,25 milliard d'US dollars venant à
échéance en 2046 (les « Obligations 2046 » et, avec les Obligations
2021 et les Obligations 2026, les « Obligations »). Le montant en
principal global de 2,75 milliards d'US dollars, et le produit net de l'offre
est d'environ 2,74 milliards d'US dollars, avant frais et avant déduction de
la rémunération des intermédiaires financiers.
B.5
Description du
groupe
Intel est la société mère du groupe Intel. Intel détient, directement ou
indirectement, 100 % du capital et des droits de vote de chacune de ses
filiales (exception faite des actions conférant l'admissibilité aux postes
d'administrateurs). Au 26 décembre 2015, Intel avait 34 filiales
importantes.
Au 2 avril 2016, Intel detient une participation de 49 % dans IM Flash
Technologies LLC (« IMFT »), une participation de 17 % dans Cloudera,
Inc. (« Cloudera ») et une participation minoritaire d'environ 20 % dans
Beijing UniSpreadtrum Technology Ltd. Durant le premier trimestre de
2016, Intel a pris le contrôle de Care Innovations LLC, sa société en
participation (joint venture) avec General Electric Company.
Veuillez également vous référer à la description ci-dessus de la Nouvelle
Structure Organisationnelle.
B.6
2
Participation au
capital ou au droit
de vote d'Intel
2
Sans objet. Conformément à son Q&A , l'Autorité européenne des
marchés financiers (« ESMA », European Securities and Markets
Authority) considère que la Rubrique 18 de l'Annexe I du Règlement de la
Commission (CE) No 809/2004 du 29 avril 2004 tel que modifié par les
Règlements délégués (UE) de la Commission No 486/2012 du 30 mars
2012, No 862/2912 du 4 juin 2012 et No 759/2013 du 30 avril 2013 (tel
que modifié, le « Règlement Prospectus ») n'est généralement pas
pertinente dans le cadre d'offres d'actions aux salariés et peut ainsi être
omise du prospectus conformément à l'Article 23.4 du Règlement
Prospectus.
Questions Fréquemment Posées, Prospectus : Positions communes des Membres de l'ESMA 24ème version mise à jour –
Avril 2016 (6 avril 2016 | ESMA/2016/576).
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7
B.7
Informations financières concernant Intel pour les exercices clos les 26 décembre 2015,
27 décembre 2014 et 28 décembre 2013 et pour les trimestres arrêtés les 2 avril 2016 et 28
mars 2015
Les données financières consolidées sélectionnées d’Intel reprises dans ce prospectus ont été établies
conformément aux U.S. GAAP et sont extraites des états financiers consolidés audités d’Intel pour les
exercices clos les 26 décembre 2015, 27 décembre 2014 et 28 décembre 2013 et des états financiers
consolidés condensés d'Intel pour les trimestres arrêtés les 2 avril 2016 et 28 mars 2015.
DONNEES SELECTIONNEES DES ETATS FINANCIERS DES TROIS DERNIERS EXERCICES CLOS
Exercices clos le
(Montants en US Dollars en millions, sauf pour les montants par
action)
Chiffre d’affaires
Marge brute
Pourcentage de la marge brute
Recherche et développement (« R&D »)
Frais de commercialisation, frais généraux et administratifs
(« MG&A »)
R&D et MG&A en tant que pourcentage du chiffre d'affaires
Résultat opérationnel
Résultat net
Taux d'imposition effectif
Résultat par action ordinaire
Avant dilution
Après dilution
Moyenne pondérée des actions ordinaires en circulation
après dilution
Dividendes par action
Déclarés
Payés
Trésorerie nette générée par les opérations
Acquisitions d’immobilisations corporelles
Rachat d'actions ordinaires
Dividendes payés aux actionnaires
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Trésorerie et disponibilités
Immobilisations corporelles, nettes
(1)
Total actif
Dette
Capitaux temporaires
Capitaux propres
Salariés (en milliers)
27 décembre
2014
28 décembre
2013
55 355
34 679
62,6%
12 128
$ 55 870
$ 35 609
63,7%
$ 11 537
$
$
7 930
36,2%
14 002
11 420
19,6%
$
8 136
35,2%
$ 15 347
$ 11 704
25,9%
$
2,41
2,33
$
$
$
$
2,39
2,31
4 894
5 056
0,96
0,96
19 017
7 326
3 001
4 556
$
0,90
$
0,90
$ 20 418
$ 10 105
$ 10 792
$ 4 409
26 décembre
2015
(Montants en US Dollars en millions)
(1)
26 décembre
2015
$ 15 308
$ 31 858
$ 101 459
$ 22 670
$
897
$ 61 085
107,3
27 décembre
2014
$
$
$
$
$
$
2 561
33 238
90 012
13 655
912
55 865
106,7
$
$
$
52 708
31 521
59,8%
10 611
8 088
35,5%
12 291
9 620
23,7%
1,94
1,89
5 097
$
$
$
$
$
$
0,90
0,90
20 776
10 711
2 147
4 479
28 décembre
2013
$
$
$
$
$
$
5 674
31 428
89 789
13 385
—
58 256
107,6
Durant le premier trimestre de 2016, Intel a opté pour l'adoption anticipée d'une norme comptable américaine modifiée
requérant le classement par Intel des actifs et passifs d'impôt différé en actifs et passifs à long terme dans le bilan consolidé,
au lieu de séparer l'impôt différé en court terme et long terme. La norme comptable modifiée a été adoptée de façon
3731408-v4\
8
rétroactive et a résulté en la réduction des actifs totaux d'Intel pour les périodes présentées.
Durant le quatrième trimestre de l'exercice fiscal 2015, le prix de clôture de l'action conditionnel relatif au
droit de conversion dans le cadre de l'emprunt obligataire de 2009 a été satisfait et les obligations ont été
converties à l'option des détenteurs durant le premier trimestre de l'exercice fiscal 2016. L'excédent du
montant en espèces payable en cas de conversion par rapport à la valeur comptable des obligations
2009 a été classé en capitaux temporaires dans le bilan consolidé d'Intel.
Durant les exercices fiscaux 2013, 2015 et 2016, l'équipe dirigeante a approuvé plusieurs mesures de
restructuration, y compris des réductions ciblées des forces salariées ainsi que le retrait de certaines
activités ou d'installations. Veuillez également vous référer au Plan de Restructuration 2016 décrit cidessus dans l'Elément B.4a.
DONNEES FINANCIERES TRIMESTRIELLES SELECTIONNEES
Données consolidées et condensées du compte de résultat d’exploitation :
Trimestres arrêtés
2 avril
28 mars
2016
2015
(Montants en US Dollars en millions, sauf pour les montants par action –
non-audité)
Chiffre d’affaires net
Marge brute
R&D
Résultat opérationnel
Résultat net
Résultat par action ordinaire avant dilution
Résultat par action ordinaire après dilution
Dividendes déclarés par action ordinaire
Moyenne pondérée des actions ordinaires en circulation
Avant dilution
Après dilution
$
$
$
$
$
$
$
$
13 702
8 130
3 246
2 568
2 046
0,43
0,42
0,52
$
$
$
$
$
$
$
$
4 722
4 875
12 781
7 730
2 995
2 615
1 992
0,42
0,41
0,48
4 741
4 914
Données consolidées et condensées du bilan :
26 décembre
*
2015
2 avril
2016
(Montants en US Dollars en millions – non-audité)
Trésorerie et disponibilités
Immobilisations corporelles, nettes
Total actif
Dette
Capitaux temporaires
Capitaux propres
* Extrait du bilan consolidé audité.
$
$
$
$
$
$
3 061
32 644
105 467
25 369
894
61 174
$
$
$
$
$
$
15 308
31 858
101 459
22 670
897
61 085
Durant le premier trimestre de l'exercice fiscal 2016, le prix de clôture de l'action conditionnel relatif au
droit de conversion dans le cadre de l'emprunt obligataire de 2009 a été satisfait et les obligations ont été
converties à l'option des détenteurs durant le deuxième trimestre de l'exercice fiscal 2016. En
conséquence, le montant reporté de 1,1 milliard d'US dollars de l'emprunt obligataire de 2009 a été
classé en dette à court terme dans le bilan condensé consolidé d'Intel au 2 avril 2016 (1,1 milliard d'US
dollars au 26 décembre 2015). L'excédent du montant en espèces payable en cas de conversion par
rapport à la valeur comptable des obligations 2009 de 894 millions d'US dollars a été classé en capitaux
temporaires dans le bilan consolidé d'Intel au 2 avril 2016 (897 millions d'US dollars au 26 décembre
2015).
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9
B.8
Informations
financières pro
forma
Sans objet. Conformément à son Q&A, ESMA considère que la Rubrique
20.2 de l'Annexe I du Règlement Prospectus n'est généralement pas
pertinente dans le cadre d'offres d'actions aux salariés et peut ainsi être
omise du prospectus conformément à l'Article 23.4 du Règlement
Prospectus.
B.9
Prévision ou
estimation du
bénéfice
Sans objet. Le présent prospectus ne contient pas de prévision ou
estimation du bénéfice.
B.10
Réserves dans le
rapport d'audit
concernant les
informations
financières
historiques
Sans objet. Il n'y a pas de réserve dans le rapport d'audit.
B.11
Déclaration sur le
fonds de
roulement
Sans objet. Le fonds de roulement d'Intel est suffisant au regard de ses
obligations actuelles.
SECTION C — VALEURS MOBILIERES
C.1
Nature et catégorie
des valeurs
mobilières offertes,
y compris le
numéro
d'identification
Les Actions offertes dans le cadre du présent prospectus seront des
actions nouvellement émises. Les Actions offertes dans le cadre des
Plans Irlandais seront acquises sur le marché du NASDAQ Global Select
Market (« NASDAQ »).
C.2
Monnaie des
valeurs mobilières
Les valeurs mobilières émises seront libellées en dollar américain.
C.3
Nombre d'actions
émises
Au 2 avril 2016, Intel était autorisée à émettre 10 000 millions Actions et
50 millions actions de préférence, d'une valeur nominale de 0,001 d'US
dollars. Au 22 avril 2016, il y avait environ 4 722 millions Actions en
circulation et aucune action de préférence émise ou en circulation.
C.4
Droits attachés aux
valeurs mobilières
Aucun Participant (tel que défini dans l'Elément E.3 ci-dessous) n'aura de
droit de vote, de droit aux dividendes, ou un autre droit d'actionnaire suite
à une quelconque offre dans le cadre du Plan d'Achat d'Actions avant que
les Actions n'aient été acquises au nom du Participant. Suite à
l'acquisition, le Participant détiendra les droits attachés aux Actions
décrits ci-dessous :
Les Actions sont ou seront, après leur émission, cotées sur le NASDAQ
sous le mnémonique « INTC ». Le numéro CUSIP des Actions est
458140-10-0.
Droit aux Dividendes. Les Statuts d'Intel, tels que modifiés et reformulés
au 21 janvier 2016 (les « Statuts ») contiennent des dispositions relatives
au droit aux dividendes. Conformément à la Loi des Sociétés de l'Etat du
Delaware, aux Etats-Unis (General Corporation Law of the State of
Delaware, USA, le « DGCL ») et sous réserve des droits préférentiels
3731408-v4\
10
applicables aux actions de préférence d'Intel en circulation à ce moment,
les détenteurs d'Actions en circulation ont le droit de recevoir des
dividendes soit (1) issus du surplus, soit (2) issus des bénéfices nets de
la Société pour l'année fiscale durant laquelle le dividende est déclaré
et/ou l'année fiscale précédente tel que déterminé par le Conseil
d'administration d'Intel (le « Conseil »), dans le cas où il n'y a pas de
surplus (veuillez consulter la Section 170 du DGCL).
Droit de Vote. Sauf disposition contraire de la loi, seules les personnes
au nom desquelles les actions habilitées à voter figurent sur le registre
des actions de la Société à la date de référence afin de déterminer les
actionnaires autorisés à voter lors de l'assemblée seront autorisés à voter
lors de ladite assemblée.
Droit de Recevoir des Sommes Issues de la Liquidation. Dans
l'éventualité d'une liquidation volontaire ou involontaire, dissolution ou
distribution des actifs d'Intel, les actifs disponibles pour distribution aux
actionnaires seront distribués proportionnellement aux détenteurs des
Actions à ce moment, après désintéressement des détenteurs des
actions de préférence.
Absence de Droit Préférentiel de Souscription, de Remboursement
ou de Conversion. Les Actions ne donnent pas de droit préférentiel de
souscription et ne sont pas sujettes à conversion ou remboursement.
C.5
Restrictions liées
au transfert
Sans objet. Les Actions dans le cadre de cette offre sont enregistrées
dans le Formulaire S-8 déposé auprès de la SEC et sont généralement
transférables librement.
C.6
Admission à la
négociation sur un
marché réglementé
Sans objet. Comme mentionné dans l'Elément C.1 ci-dessus, les Actions
sont cotées sur NASDAQ.
C.7
Politique de
dividendes
Le montant total des dividendes payés en s'élevaient à 4,6 milliards d'US
dollars en 2015, en comparaison avec 4,4 milliards d'US dollars en 2014,
et 4,5 milliards d'US dollars en 2013.
Au 26 décembre 2015, Intel a payé des dividendes au cours de chacun
des 93 trimestres passés. En janvier 2016, le Conseil a déclaré un
dividende de 0,26 US dollars par Action pour le premier trimestre de
er
2016. Le dividende était payable le 1 mars 2016 aux actionnaires
inscrits sur le registre au 7 février 2016. En mars 2016, le Conseil a
déclaré un dividende en espèces de 0,26 US dollars par Action pour le
er
deuxième trimestre de 2016. Le dividende était payable le 1 juin 2016
aux actionnaires inscrits sur le registre au 7 mai 2016.
3731408-v4\
11
SECTION D — RISQUES
D.1
Principaux risques
propres à Intel ou à
son secteur
d'activité
Ci-dessous sont résumés les principaux risques, incertitudes et autres
facteurs pouvant affecter les résultats futurs d'Intel. Les risques et
incertitudes décrits ci-dessous ne sont pas les seuls risques et
incertitudes auxquels Intel fait face.
Des modifications de la demande des produits pourraient nuire au
résultat d’exploitation et à la situation financière d’Intel.
• La demande des produits d'Intel sont variables et difficiles à prévoir.
• Intel fait face à une concurrence importante.
Intel a des activités mondiales et est soumis à d'importants risques
dans différentes juridictions.
• Les conditions mondiales et régionales pourraient nuire aux résultats
financiers d'Intel.
Intel gère ses propres installations de fabrication et, en
conséquence, est vulnérable quant aux risques liés à la fabrication.
• Intel est soumis aux risques en matière de droit et réglementations de
l'environnement.
Intel est soumis à des risques en matière de propriété intellectuelle
(« IP ») et des risques liés aux procédures judiciaires et
règlementaires.
• Intel pourrait ne pas être capable de faire respecter ou de protéger ses
droits d’IP.
• Des tiers pourraient entreprendre des actions en contrefaçon d'IP à
l'encontre d'Intel, ce qui pourraient nuire aux ses activités.
• Intel est soumis à des risques liés aux procédures judiciaires et
règlementaires. Actuellement, la direction pense que le résultat final de
ces procédures, concernant tant leur impact individuel que général,
n’affectera pas significativement la situation financière de la Société,
son résultat d’exploitation, ses flux de trésorerie ou les tendances
générales. Toutefois, les conséquences de procédures judiciaires et
autres enquêtes gouvernementales qui y sont liées sont par nature
incertaines et des décisions défavorables ou d’autres évènements sont
possibles
Intel est soumis à des risques en matière de cybersécurité et de vie
privée
• Des tiers tentent d'obtenir un accès non-autorisé au réseau d'Intel, ses
produits, ses services et son infrastructure.
Intel est soumis à des risques associés aux transactions.
• Les acquisitions, cessions et autres opérations effectuées par Intel
pourraient ne pas atteindre les objectifs stratégiques, perturber ses
3731408-v4\
12
activités en cours et nuire à son résultat opérationnel.
• Les modifications relatives au plan de restructuration annoncé par
Intel, et d'autres facteurs, pourraient affecter son résultat opérationnel
et sa situation financière.
D.3
Principaux risques
propres aux
actions
Les Participants assument le risque lié aux fluctuations de devises au
moment (i) de leurs contributions au Plan d'Achat d'Actions par le biais de
retenues sur salaire et (ii) de la vente de leurs Actions.
SECTION E — OFFRE
E.1
Produit net
3
En supposant que les 16 390 salariés éligibles en Autriche, au
Danemark, en Finlande, en France, en Allemagne, en Irlande, aux PaysBas, en Pologne, en Roumanie, en Suède et au Royaume-Uni acquièrent
le nombre maximum d'Actions dans le cadre du Plan d'Achat d'Actions
offert au titre du présent prospectus, c'est-à-dire un total de 42 452,46 US
dollars chacun, le produit brut d'Intel résultant de l'offre dans le cadre du
Plan d'Achat d'Actions au titre du présent prospectus serait de
695 795 819,40 US dollars. Après déduction des frais légaux et
comptables liés à l'offre, le produit net serait d'environ 695 695 819,40 US
dollars.
Actuellement, le produit net découlant des Plans Irlandais ne peut être
calculé étant donné que l'administrateur (trustee) acquerra les Actions sur
le marché du NASDAQ à la demande du Participant Irlandais (tel que
défini ci-dessous) et le prix d'acquisition sera le prix de marché par Action
sur le NASDAQ à la date à laquelle les Actions sont acquises.
E.2a
Raisons de l'offre
et utilisation du
produit
Le but du Plan d'Achat d'Actions est d'offrir aux salariés d'Intel et de ses
filiales désignées (les « Filiales Participantes ») l'opportunité d'acquérir
des Actions et de devenir des actionnaires d'Intel et, d'ainsi, avoir un
intérêt supplémentaire de contribuer à la prospérité de la Société.
Le but des Plans Irlandais est de permettre aux salaries éligibles de
devenir des actionnaires d'Intel.
Le produit net sera utilisé pour les besoins généraux de la Société.
E.3
Description des
termes et
conditions de
l'offre
Intel offrira aux salariés éligibles de la Société et de certaines de ses
filiales situées dans l’EEE le droit d’acquérir des Actions en vertu du Plan
d’Achat d’Actions. Intel offrira également à ses salariés situés en Irlande
le droit d’acquérir des Actions en vertu des Plans Irlandais.
L'offre du Plan d’Achat d’Actions et/ou des Plans Irlandais peut être
considérée comme une offre au public de valeurs mobilières au regard de
la Directive 2003/71/CE du Parlement Européen et du Conseil Européen
du 4 novembre 2003, telle que modifiée par la Directive 2010/73/UE et la
3
Au 23 mars 2016, il y avait 539 salariés éligibles en Autriche, 284 salariés éligibles au Danemark, 335 salariés éligibles en
Finlande, 1 139 salariés éligibles en France, 4 007 salariés éligibles en Allemagne, 5 180 salariés éligibles en Irlande, 351
salariés éligibles aux Pays-Bas, 2 271 salariés éligibles en Pologne, 549 salariés éligibles en Roumanie, 195 salariés éligibles
en Suède et 1 540 salariés éligibles au Royaume-Uni.
3731408-v4\
13
Directive 2014/51/UE (la « Directive Prospectus ») dans les pays suivants
de l'EEE, sous réserve de la législation en vigueur dans chacun de ces
pays : Autriche, Danemark, Finlande, France, Allemagne, Irlande, PaysBas, Pologne, Roumanie, Suède et Royaume-Uni. L'offre du Plan d’Achat
d’Actions peut également être présentée dans les pays suivants de
l'EEE : Belgique, République Tchèque, Grèce, Hongrie, Italie,
Luxembourg, Norvège, Portugal et Espagne. Toutefois, cette offre n'est
pas considérée comme une offre au public de valeurs mobilières et/ou
l'obligation de publication d'un prospectus ne s'applique pas à l'offre
conformément à la législation transposant la Directive Prospectus dans
ces pays. Le montant total de l'offre du Plan d’Achat d’Actions et des
Plans Irlandais dans l'EEE est supérieur à 5 millions d’euros sur une
période de 12 mois.
Le présent prospectus sera mis à disposition des salariés des filiales
d’Intel établies dans les pays cités ci-dessus dans lesquels l'offre du Plan
d’Achat d’Actions et/ou des Plans Irlandais peut être considérée comme
une offre au public de valeurs mobilières, dans les locaux du siège social
respectif de leur employeur.
E.3.1
Le Plan d'Achat d'Actions
Dans le cadre du Plan d’Achat d’Actions, les salariés éligibles d’Intel et de
ses Filiales Participantes se voient proposer le droit d’acquérir des
Actions, avec une décote, financées avec des sommes prélevées sur la
rémunération éligible des salariés. Le Plan d’Achat d’Actions est
administré par le Comité des Rémunérations (le « Comité ») du Conseil.
Le Comité a attribué au Vice-Président Senior des Ressources Humaines
de la Société l’autorité concernant l’administration journalière du Plan
d’Achat d’Actions et concernant la désignation des Filiales Participantes.
Le Plan d’Achat d’Actions est composé de périodes d’inscriptions dont la
durée varie en fonction des pays (les « Périodes d’Inscription ») et durant
lesquelles les salariés éligibles peuvent choisir de participer à la période
d’achat de six mois suivante (la « Période de Souscription »).
Généralement, les salariés éligibles se voyant proposer de participer
dans le Plan d’Achat d’Actions peuvent décider de souscrire au Plan
d’Achat d’Actions (les « Participants ») en complétant et remettant un
formulaire de souscription mis à disposition par Intel, à la date prescrite
par le Comité avant la Période de Souscription (la « Date d’Inscription »).
Les Périodes de Souscription débutent chaque 20 février et 20 août et se
terminent le dernier jour ouvrable des périodes de six mois se terminant,
respectivement, le 19 août et le 19 février, ou à toute autre date
déterminée par le Comité.
Les Périodes d’Inscription couvertes par le présent prospectus sont les
suivantes:
• Pour la Période de Souscription du 20 août 2016 au 19 février 2017 :
o
3731408-v4\
Du 1er juillet au 31 juillet 2016 pour les salariés éligibles d'Intel et
d'Altera en Autriche, au Danemark, Finlande, France, Allemagne,
Irlande, aux Pays-Bas, Pologne, Roumanie, en Suède et au
Royaume-Uni.
14
o
Du 1er juillet au 12 août 2016 pour les salariés éligibles des filiales
Wind River Systems, Inc. (« Wind River ») (pour tous les pays).
• Pour la Période de Souscription du 20 février au 19 août 2017 :
o
Du 1er janvier au 31 janvier 2017 pour les salariés éligibles d'Intel
et d'Altera en Autriche, au Danemark, Finlande, France,
Allemagne, Irlande, aux Pays-Bas, Pologne, Roumanie, en Suède
et au Royaume-Uni.
o
Du 1er janvier au 12 février 2017 pour les salariés éligibles des
filiales Wind River (pour tous les pays).
Le dernier jour de chaque Période d’Inscription indiquée ci-dessus est la
Date d’Inscription pour la Période de Souscription applicable.
Une fois qu’ils se sont inscrits, les Participants peuvent acquérir des
Actions, avec une décote, le dernier jour ouvrable de chaque Période de
Souscription (la « Date d’Acquisition »). La participation est limitée à (i)
l’achat d’Actions ayant une valeur de marché, à la Date de
Commencement (telle que définie ci-dessous) applicable, non supérieure
à 25 000 US dollars par année civile, (ii) aux salariés possédant moins de
5% des actions d’Intel avec droit de vote ou des actions de capital d’Intel
et (iii) à l'achat d'un maximum de 72 000 Actions au cours d'une Période
de Souscription.
Au cours de chaque Période d’Inscription, les Participants peuvent choisir
de contribuer au Plan d’Achat d’Actions par le biais de retenue sur
salaires d’un montant exprimé en nombre entier entre 2% et 5% de leur
rémunération éligible, tel qu’exprimé sur leur formulaire de souscription.
La participation des Participants dans le Plan d’Achat d’Actions et les
retenues sur salaire continueront jusqu’à ce que le Participant se retire du
Plan d’Achat d’Actions, devienne inéligible à participer ou interrompe son
contrat de travail. Un Participant peut uniquement diminuer son taux de
retenue sur salaire et, ce, une seule fois durant la Période de
Souscription. Un Participant peut modifier son taux de retenue sur salaire
pour la Période de Souscription suivante par la remise du formulaire
adéquat, à la période et selon les modalités déterminées par le Comité.
En outre, un Participant peut se retirer du Plan d’Achat d’Actions par la
remise d’un formulaire de retrait et de remboursement, à la période et
selon les modalités déterminées par le Comité.
Les retenues sur salaire cumulées sont utilisées afin d’acquérir des
Actions à la fin de chaque Période de Souscription de six mois. Le prix
d'achat par Action est égal à 85% (ou un pourcentage supérieur tel que
déterminé par le Comité) du plus faible des deux montants suivants : (1)
er
la valeur de marché d'une Action le dernier jour ouvrable avant le 1
er
février pour la Période de Souscription débutant le 20 février et le 1 août
pour la Période de Souscription débutant le 20 août (la « Date de
Commencement ») ou (2) la valeur de marché d'une Action à la Date
d’Acquisition (le « Prix d’Acquisition »).
Il n’existe aucun frais d’acquisition ou de gestion des Actions au regard
du Plan d’Achat d’Actions. Les Participants peuvent également choisir de
vendre leurs Actions automatiquement un à deux jours après la Date
d’Acquisition. Les Participants acceptent le risque de fluctuation de
3731408-v4\
15
devises au moment (i) de leur participation au Plan d’Achat d’Actions par
le biais de retenue sur salaire et (ii) de la vente de leurs Actions.
Le Plan d’Achat d’Actions a été initialement approuvé par les actionnaires
d'Intel lors de l'assemblée générale des actionnaires qui s'est tenue le 17
mai 2006 et a été modifié depuis de temps à autres. La dernière
modification récente approuvée par les actionnaires a été l'extension de
la durée du Plan d'Achat d'Action jusqu'en 2021. Cette modification a été
approuvée par le Conseil le 18 mars 2015 et les actionnaires le 21 mai
2015. Le 20 janvier 2016, le Comité a approuvé des modifications au Plan
d'Achat d'Actions qui ne requéraient pas l'approbation des actionnaires.
Les principales modifications ont été faites afin de faciliter les offres au
terme du Plan d'Achat d'Actions faites aux salariés et filiales situés endehors des Etats-Unis (par exemple, en élargissant l'éligibilité aux
salariés saisonniers et à temps partiel) et d'aligner les Périodes de
Souscription à travers le monde. D'autres modifications de forme et
techniques ont été faites (tel que la suppression du report des
prélèvements sur salaire non utilisés). Il est prévu que les modifications
entrent en vigueur le 1er janvier 2017. Les salariés seront informés en
conséquence.
Au 2 avril 2016, environ 172 millions Actions étaient disponibles pour
émission au titre du Plan d’Achat d’Actions au niveau mondial (sur un
maximum de 373 millions Actions disponibles au titre du Plan d’Achat
d’Actions).
E.3.2
Les Plans Irlandais
Les salariés éligibles se voient offrir une participation aux Plans Irlandais,
qui sont des plans d’achat d’actions, et peuvent décider de souscrire (le
« Participant Irlandais ») en complétant le processus de souscription.
Pour être éligible, un salarié doit être employé en Irlande par Intel Ireland,
à la date de qualification.
Le Plan d’Intéressement d’Intel Ireland est offert aux salariés éligibles
d’Intel Ireland Limited et le Plan d’Intéressement d'Intel Shannon est offert
aux salariés éligibles d'Intel Research and Development Ireland Ltd. Les
Participants Irlandais peuvent également choisir de participer au Plan
d’Achat d’Actions.
Les Plans Irlandais permettent aux salariés d’utiliser leur argent reçu à
titre de prime annuelle versée chaque mois de février (la « Prime
Annuelle de Performance ») et la prime trimestrielle de participation au
résultat d’Intel (la « Prime Trimestrielle ») pour acheter des Actions. Au
regard de l’ECBP, Intel paie aux salariés éligibles des primes, en janvier,
en avril, en juillet et en octobre, basées sur les profits d’Intel et le salaire
des salariés éligibles.
Les Plans Irlandais sont offerts aux salariés quatre fois par an:
• Janvier : les salariés peuvent décider s'ils veulent faire des
contributions issues de la Prime Annuelle de Performance et du
paiement de la Prime Trimestrielle de janvier.
• Avril : les salariés peuvent décider s'ils veulent faire des contributions
issues du paiement de la Prime Trimestrielle d'avril.
3731408-v4\
16
• Juillet : les salariés peuvent décider s'ils veulent faire des contributions
issues du paiement de la Prime Trimestrielle de juillet.
• Octobre : les salariés peuvent décider s'ils veulent faire des
contributions issues du paiement de la Prime Trimestrielle d'octobre.
Les salariés à temps plein, les salariés à temps partiel et les stagiaires
sont éligibles afin de participer à la Prime Trimestrielle. Le fisc irlandais
impose des limites quant aux montants que les salariés peuvent investir
dans les Plans Irlandais. Les limitations suivantes doivent être respectées
afin que des Actions puissent être achetées au nom du salarié. Le
montant maximum des contributions annuelles pouvant être faites par un
salarié au regard des Plans Irlandais est de €12 700, au titre de toutes les
primes (i.e., Prime Annuelle de Performance et Prime Trimestrielle).
Chaque salarié peut investir, dans les Plans Irlandais, un montant de sa
Prime Annuelle de Performance à hauteur de 1,01 % de sa rémunération
de base multipliée par un facteur progressif tel que décrit dans les Plans
Irlandais.
Les Actions dans le cadre des Plans Irlandais seront détenues par un
administrateur (trustee) au nom des Participants Irlandais et ne pourront,
normalement, pas être vendues lors des deux années suivant la date
d’attribution. Afin de bénéficier du régime fiscal de faveur, le Participant
Irlandais ne peut vendre les Actions avant les trois années suivant
l’acquisition. Si le Participant Irlandais vend les Actions avant trois ans
suivant la date d’attribution, un impôt sur le revenu sera dû sur le prix
d’acquisition des Actions. L’administrateur achètera les Actions au
comptant sur le NASDAQ et le prix sera le prix de marché par Action sur
le NASDAQ à la date où les Actions ont été achetées, à la suite du
paiement au titre de la Prime Annuelle de Performance et de la Prime
Trimestrielle mentionnées ci-dessus. Il n’existe aucun frais d’acquisition
ou de gestion des Actions au regard des Plans Irlandais.
E.4
Description des
intérêts importants
liés à l'offre, y
compris les
conflits d'intérêts
Sans objet. Il n'existe pas de tels intérêts.
E.5
Nom de l'entité
offrant la vente des
valeurs mobilières
Intel Corporation.
3731408-v4\
17
E.6
Dilution maximum
En supposant que les Actions offertes dans le cadre du présent
prospectus aux 16 390 salariés éligibles en Autriche, Danemark,
Finlande, France, Allemagne, Irlande, Pays-Bas, Pologne, Roumanie,
Suède et au Royaume-Uni sont toutes des Actions nouvellement émises,
la détention d'un actionnaire d'Intel détenant actuellement un pour cent
(1 %) du capital total d'Intel en circulation au 22 avril 2016 (à savoir,
47 220 000 Actions) et qui ne participe pas à l'offre, serait diluée de la
façon suivante :
Avant l'offre (au 22 avril
2016)
Après l'émission de
25 994 540 Actions dans le
cadre du Plan d'Achat
d'Actions
E.7
Estimation des
dépenses
facturées à
l'investisseur
3731408-v4\
Pourcentage du
total des Actions
en circulation
Nombre total des
Actions en
circulation
1,00 %
4 722 000 000
0,9945 %
4 747 994 540
Sans objet. Il n'existe pas de telles dépenses.
18
Intel Corporation
2200 Mission College Boulevard
Santa Clara, California 95054, U.S.A.
INTEL CORPORATION 2006 STOCK PURCHASE PLAN,
AS AMENDED AND RESTATED (THE “SPP”)
INTEL IRELAND PROFIT SHARING SCHEME AND
INTEL SHANNON PROFIT SHARING SCHEME
(THE “IRISH PLANS”)
Prospectus for the employees of certain European Economic Area (“EEA”) subsidiaries
of Intel Corporation, subject to the applicable legislation in each country
Pursuant to articles L. 412-1 and L. 621-8 of the Code Monétaire et Financier and its General
Regulation, in particular articles 211-1 to 216-1 thereof, the Autorité des marchés financiers
(“AMF”) has attached visa number 16-262 dated June 17, 2016, onto this prospectus. This
prospectus was established by the issuer and incurs the responsibility of its signatories. The visa,
pursuant to the provisions of Article L. 621-8-1-I of the Code Monétaire et Financier, was granted
after the AMF verified that the document is complete and comprehensible, and that the
information it contains is consistent. The visa represents neither the approval of the worthiness of
the operation nor the authentication of the financial and accounting information presented.
This prospectus will be made available in printed form to employees of the EEA subsidiaries of Intel
Corporation based in countries in which offerings under the plans listed above are considered public
offerings, subject to the applicable legislation in each country, at their respective head offices. In addition,
this prospectus along with summary translations (as applicable) will be posted on the intranets of Intel
Corporation, Altera Corporation and Wind River Systems, Inc., and free copies will be available to the
employees upon request by contacting the human resources departments of their employers. This
prospectus, together with the French translation of its summary, will also be available on the website of
the AMF, www.amf-france.org.
3714744-v9\
NOTE TO THE PROSPECTUS
This prospectus, which contains material information concerning Intel Corporation, was established
pursuant to articles 211-1 to 216-1 of the AMF General Regulation. Pursuant to Article 25 of Commission
Regulation (EC) No 809/2004 of 29 April 2004 as amended by Commission Delegated Regulations (EU)
No 486/2012 of 30 March 2012, No 862/2012 of 4 June 2012 and No 759/2013 of 30 April 2013 (the
“Prospectus Regulation”), this prospectus is composed of the following parts in the following order:
(1)
a table of contents,
(2)
the summary provided for in Article 5(2) of Directive 2003/71/EC of the European Parliament and of
the European Council of 4 November 2003, as amended by Directive 2010/73/EU and Directive
2014/51/EU (the “Prospectus Directive”) (Part I constitutes the prospectus summary),
(3)
the risk factors linked to the issuer and the type of security covered by the issue, and
(4)
excerpts from Annexes I and III of the Prospectus Regulation which, by application of Articles 3, 4,
and 6 of the Prospectus Regulation and question 71 of the European Securities and Markets
1
Authority (“ESMA”) Q&A, are required for this offering of equity securities to employees of Intel
Corporation and its affiliates.
This prospectus also contains supplemental information concerning Intel Corporation, the SPP, the Irish
Plans (Part II - Section B), as well as the following documents (Exhibits):
-
Intel Corporation 2006 Stock Purchase Plan, as amended and restated;
-
Description of the Irish Plans; and
-
Current Report on Form 8-K furnished by Intel Corporation to the U.S. Securities and Exchange
Commission (the “SEC”) on April 19, 2016.
In this prospectus, the terms “we” “our” “us” or “Intel” mean Intel Corporation and its subsidiaries.
All references to “$” in this prospectus refer to U.S. dollars.
1
Frequently Asked Questions, Prospectuses: Common positions agreed by ESMA Members 24th updated version – April 2016
(6 April 2016| ESMA/2016/576).
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TABLE OF CONTENTS
Part I Constitutes the Prospectus Summary
Page
PART I — PROSPECTUS SUMMARY .........................................................................................................................5
SECTION A — INTRODUCTION AND WARNINGS ......................................................................................5
SECTION B — ISSUER..................................................................................................................................5
SECTION C — SECURITIES ....................................................................................................................... 11
SECTION D — RISKS .................................................................................................................................. 12
SECTION E — OFFER ................................................................................................................................. 13
PART II — PROSPECTUS ......................................................................................................................................... 19
SECTION A — RISK FACTORS .................................................................................................................. 19
I.
RISKS RELATED TO INTEL’S BUSINESS AND INDUSTRY ........................................................ 19
II.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK............................ 29
SECTION B — SUPPLEMENTAL INFORMATION CONCERNING INTEL CORPORATION AND
THE SPP .......................................................................................................................... 31
I.
THE OUTLINE ................................................................................................................................ 31
II.
ELIGIBILITY ................................................................................................................................... 33
III.
DELIVERY AND SALE OF THE SHARES ..................................................................................... 35
IV.
RIGHTS RELATED TO THE SHARES ........................................................................................... 36
V.
THE IRISH PLANS ......................................................................................................................... 41
VI.
STATEMENT OF CAPITALIZATION AND INDEBTEDNESS AS OF APRIL 2, 2016..................... 42
VII. MAXIMUM DILUTION AND NET PROCEEDS ............................................................................... 47
VIII. DIRECTORS AND EXECUTIVE OFFICERS.................................................................................. 48
IX.
EMPLOYEES ................................................................................................................................. 59
X.
WORKING CAPITAL STATEMENT ............................................................................................... 63
XI.
SELECTED FINANCIAL INFORMATION ....................................................................................... 63
XII. DOCUMENTS ON DISPLAY .......................................................................................................... 65
XIII. TAX CONSEQUENCES ................................................................................................................. 66
EXHIBIT I INTEL CORPORATION 2006 STOCK PURCHASE PLAN, AS AMENDED AND RESTATED ....................I
EXHIBIT II DESCRIPTION OF THE IRISH PLANS .....................................................................................................II
EXHIBIT III CURRENT REPORT ON FORM 8-K FURNISHED BY INTEL CORPORATION TO THE SEC
ON APRIL 19, 2016 .........................................................................................................................III
CROSS-REFERENCE LISTS ........................................................................................................................................I
ANNEX I MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE REGISTRATION DOCUMENT
(SCHEDULE).....................................................................................................................................I
ANNEX III MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE SECURITIES NOTE
(SCHEDULE).................................................................................................................................. VI
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COMPANY REPRESENTATIVE FOR PROSPECTUS
1.1
Stacy J. Smith, Executive Vice President, Chief Financial Officer, and Principal Accounting
Officer, acting for and on behalf of Intel Corporation.
1.2
To my knowledge, after having taken all reasonable measures for this purpose, the information
contained in this prospectus fairly reflects the current situation and no material omission has been
made.
1.3
Intel Corporation has obtained a letter from its independent registered public accounting firm in
relation to this prospectus. The independent registered public accounting firm has read the
prospectus, including the financial information concerning Intel Corporation for the fiscal years
ended December 26, 2015, December 27, 2014 and December 28, 2013 and for the quarters
ended April 2, 2016 and March 28, 2015 contained in Part I - Section B. 7 and the Selected
Financial Data contained in Part II - Section B. 11.1 of this prospectus, in accordance with the
professional standards and interpretations applicable to it in the United States of America
pursuant to PCAOB Interim Auditing Standard AU Section 550, Other Information in Documents
Containing Audited Financial Statements.
/s/ Stacy J. Smith
Stacy J. Smith
Executive Vice President, Chief Financial Officer, and
Principal Accounting Officer
Santa Clara, California, U.S.A., June 16, 2016
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PART I — PROSPECTUS SUMMARY
VISA NUMBER 16-262 DATED JUNE 17, 2016 OF THE AMF
Summaries are made up of disclosure requirements known as “Elements.” These Elements are
numbered in Sections A – E (A.1 – E.7).
This summary contains all the Elements required to be included in a summary for this type of securities
and Issuer. Because some Elements are not required to be addressed, there may be gaps in the
numbering sequence of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of securities
and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a
short description of the Element is included in the summary with the mention of “not applicable."
SECTION A — INTRODUCTION AND WARNINGS
A.1
Warning to the
reader
This summary should be read as an introduction to the prospectus. Any
decision to invest in the securities should be based on consideration of
the prospectus as a whole by the investor. Where a claim relating to the
information contained in a prospectus is brought before a court, the
plaintiff investor might, under the national legislation of the Member
States of the European Union or States party to the EEA Agreement,
have to bear the costs of translating the prospectus before the legal
proceedings are initiated. Civil liability attaches to those persons who
have presented the summary including any translation thereof, but only if
the summary is misleading, inaccurate or inconsistent when read together
with the other parts of the prospectus or it does not provide, when read
together with the other parts of the prospectus, key information in order to
aid investors when considering whether to invest in such securities.
A.2
Consent to use of
the prospectus
Not applicable. There is no subsequent resale or final placement of
securities by financial intermediaries.
SECTION B — ISSUER
B.1
Legal and
commercial name
of the issuer
Intel Corporation (“Intel” or the “Company”).
B.2
Domicile and legal
form of Intel, the
legislation under
which it operates
and its country of
incorporation
Intel's principal offices are located at 2200 Mission College Boulevard,
Santa Clara, California 95054, U.S.A. The Company is a corporation
incorporated under the laws of the State of Delaware, U.S.A.
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B.3
Description of the
nature of Intel's
current operations
and its principal
activities
Intel is a leader in the design and manufacturing of advanced integrated
digital technology platforms. A platform consists of a microprocessor and
chipset, and may be enhanced by additional hardware, software, and
services. Intel sells these platforms primarily to original equipment
manufacturers ("OEMs"), original design manufacturers ("ODMs"), and
industrial and communications equipment manufacturers in the
computing and communications industries. Its platforms are used across
the compute continuum, in notebooks (including Ultrabook devices), 2 in
1 systems, desktops, servers, tablets, phones, and the Internet of Things
(including wearables, retail devices, and manufacturing devices). Intel
also develops and sells software and services primarily focused on
security and technology integration.
™
Net revenue for the three years ended December 26, 2015, December
27, 2014, and December 28, 2013, was as follows:
Years Ended
(In Millions)
Net revenue
Client Computing Group ("CCG")
Data Center Group ("DCG")
Internet of Things Group ("IOTG")
Software and services operating segments
("SSG")
All other
Total net revenue
Dec 26
2015
Dec 27,
2014
Dec 28,
2013
$ 32,219
15,977
2,298
$ 34,872 $ 34,645
14,387
12,163
2,142
1,801
2,167
2,694
$ 55,355
2,216
2,188
2,253
1,911
$ 55,870 $ 52,708
During the first quarter of 2016, Intel revised the presentation of its
financial results to reflect changes to certain operating segments (the
"New Organizational Structure"). Intel formed the Programmable
Solutions Group ("PSG") as a result of its acquisition of Altera
Corporation ("Altera"). Additionally, Intel formed the New Technology
Group ("NTG"), which includes products designed for wearables,
cameras, and other market segments (including drones), and determined
SSG is no longer an operating segment. Finally, Intel is electing to
separately disclose the operating results of Non-Volatile Memory
Solutions Group ("NSG"), Intel Security Group ("ISecG"), and PSG.
Intel's operating segments in effect as of April 2, 2016 include:
• CCG. Includes platforms designed for notebooks (including
Ultrabook™ devices), 2 in 1 systems, desktops (including all-in-ones
and high-end enthusiast PCs), tablets, phones, wireless and wired
connectivity products, and mobile communication components.
• DCG. Includes platforms designed for the enterprise, cloud,
communications infrastructure, and technical computing segments.
• IOTG. Includes platforms designed for Internet of Things market
segments, including retail, transportation, industrial, and buildings and
home use, along with a broad range of other market segments.
• NSG. Includes NAND flash memory products primarily used in solidstate drives.
• ISecG. Includes security software products designed to deliver
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innovative solutions that secure computers, mobile devices, and
networks around the world from the latest malware and emerging
online threats.
• PSG. Includes programmable semiconductors (primary fieldprogrammable gate array) and related products for a broad range of
market segments, including communications, networking and storage,
industrial, military, and automotive.
• All Other. The “all other” category includes revenue, expenses, and
charges such as:
-
results of operations from Intel's NTG;
-
amounts included within restructuring and asset impairment
charges;
-
a portion of profit-dependent compensation and other expenses
not allocated to the operating segments;
-
divested businesses for which discrete operating results are not
regularly reviewed by Intel's Chief Operating Decision Maker;
-
results of operations of start-up businesses that support Intel's
initiatives, including Intels' foundry business; and
-
acquisition-related costs, including amortization and
impairment of acquisition-related intangibles and goodwill.
any
Net revenue for the three months ended April 2, 2016 and March 28,
2015 was as follows:
Three Months Ended
Apr 2,
2016
(In Millions)
Net revenue
CCG
DCG
IOTG
NSG
ISecG
PSG
All other
Total net revenue
Mar 28,
2015
$
7,549
3,999
651
557
537
359
50
$
7,420
3,681
533
592
479
—
76
$
13,702
$
12,781
All prior-period amounts have been retrospectively adjusted to reflect the
way Intel internally manages and monitors segment performance starting
in fiscal year 2016 and include other minor reorganizations.
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B.4a
Recent trends
On April 19, 2016, Intel reported, on a Generally Accepted Accounting
Principles in the United States of America ("U.S. GAAP") basis, firstquarter net revenue of $13.7 billion, operating income of $2.6 billion, net
income of $2.0 billion and diluted earnings per common share of 42
cents. Intel generated approximately $4.0 billion in cash from operations,
paid dividends of $1.2 billion, and used $793 million to repurchase 27
million shares of its common stock, par value $0.001 per share
(“Shares”).
On May 2, 2016, Intel filed with the SEC its Quarterly Report on Form 10Q for the quarterly period ended April 2, 2016 ("Intel’s Form 10-Q"), in
which the cash from operations were adjusted to amount $4.1 billion.
On the same day, Intel announced a Chief Financial Officer ("CFO")
succession plan. The current CFO, Stacy J. Smith, will transition to a new
role at the Company, leading sales, manufacturing and operations once
his successor is in place. The Company is beginning a formal search
process for a new CFO that will assess both internal and external
candidates. Mr. Smith will remain firmly focused on his CFO role and
duties throughout the search and transition process.
On the same day, subsequent to the end of first quarter of 2016, Intel
announced the 2016 Restructuring Program, designed to align its
operations with evolving business needs and improve efficiencies. Under
this program, Intel intends to close certain facilities and reduce up to
twelve thousand positions globally. Accordingly, Intel expects to incur
charges of approximately $1.2 billion in the second quarter of 2016. The
actions associated with this program are expected to be fully completed
by the second quarter of 2017.
On May 19, 2016, subsequent to the end of the first quarter of 2016, Intel
issued $500 million aggregate principal amount of 1.700% Senior Notes
due 2021 (the “2021 Notes”), $1.00 billion aggregate principal amount of
2.600% Senior Notes due 2026 (the “2026 Notes”) and $1.25 billion
aggregate principal amount of 4.100% Senior Notes due 2046 (the “2046
Notes” and, together with the 2021 Notes and the 2026 Notes, the
“Notes”). The aggregate principal amount of the Notes is $2.75 billion,
and the net proceeds from the offering are approximately $2.74 billion,
before expenses and before deducting underwriting discounts.
B.5
Organizational
structure
Intel is the head of the Intel group. Intel holds, directly or indirectly, 100%
of the capital and voting rights of each of its subsidiaries (except for
directors' qualifying shares). As of December 26, 2015, Intel had 34
significant subsidiaries.
As of April 2, 2016, Intel owns a 49% interest in IM Flash Technologies,
LLC ("IMFT"), a 17% ownership interest in Cloudera, Inc. ("Cloudera")
and a minority stake of approximately 20% of Beijing UniSpreadtrum
Technology Ltd. During the first three months of 2016, Intel gained control
of Care Innovations LLC, its joint venture with General Electric Company.
Please also see the preceding discussion related to the New
Organizational Structure.
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B.6
Interests in Intel's
capital or voting
rights
B.7
Financial information concerning Intel for the fiscal years ended December 26, 2015,
December 27, 2014 and December 28, 2013, and for the quarters ended April 2, 2016 and
March 28, 2015
Not applicable. Pursuant to its Q&A, ESMA considers that Item 18 of
Annex I of the Prospectus Regulation is generally not pertinent for offers
of shares to employees and can thus be omitted from the prospectus in
accordance with Article 23.4 of the Prospectus Regulation.
The selected consolidated financial data of Intel set out in this prospectus have been prepared in
accordance with U.S. GAAP and are derived from Intel’s audited consolidated financial statements for the
fiscal years ended December 26, 2015, December 27, 2014 and December 28, 2013, and from Intel’s
unaudited consolidated condensed financial statements for the quarters ended April 2, 2016 and March
28, 2015.
SELECTED THREE-YEAR FINANCIAL DATA
Years Ended
(Dollars in Millions, Except Per Share Amounts)
Dec 26,
2015
Net revenue
Gross margin
Gross margin percentage
Research and development ("R&D")
Marketing, general and administrative ("MG&A")
R&D and MG&A as percentage of revenue
Operating income
Net income
Effective tax rate
Earnings per share of common stock
Basic
Diluted
Weighted average diluted shares of common stock
outstanding
Dividends per share of common stock
Declared
Paid
Net cash provided by operating activities
Additions to property, plant and equipment
Repurchase of common stock
Payment of dividends to stockholders
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2.41
2.33
Cash and cash equivalents
Property, plant and equipment, net
(1)
Total assets
Debt
Temporary equity
Stockholders’ equity
$
$
$
$
$
$
9
2.39
2.31
4,894
5,056
0.96
0.96
19,017
7,326
3,001
4,556
$
0.90
$
0.90
$ 20,418
$ 10,105
$ 10,792
$ 4,409
$ 15,308
$ 31,858
$ 101,459
$ 22,670
$
897
$ 61,085
Dec 28,
2013
$ 55,870
$ 35,609
63.7%
$ 11,537
$ 8,136
35.2%
$ 15,347
$ 11,704
25.9%
Dec 26,
2015
(Dollars in Millions)
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55,355
34,679
62.6%
12,128
7,930
36.2%
14,002
11,420
19.6%
Dec 27,
2014
$
$
$
$
2,561
33,238
90,012
13,655
912
55,865
1.94
1.89
5,097
$
$
$
$
$
$
Dec 27,
2014
$
$
$
$
$
$
52,708
31,521
59.8%
10,611
8,088
35.5%
12,291
9,620
23.7%
0.90
0.90
20,776
10,711
2,147
4,479
Dec 28,
2013
$
$
$
$
$
$
5,674
31,428
89,789
13,385
—
58,256
Employees (in thousands)
(1)
107.3
106.7
107.6
In the first quarter of 2016, Intel elected to early adopt an amended U.S. accounting standard requiring that Intel classify all
deferred tax assets and liabilities as non-current on the consolidated balance sheet instead of separating deferred taxes into
current and non-current. The amended standard was adopted on a retrospective basis and resulting in a reduction of Intel's
total assets for all periods presented.
During the fourth quarter of 2015, the closing stock price conversion right condition of the 2009
debentures continues to be met and the debentures will be convertible at the option of the holders during
the first quarter of 2016. The excess of the amount of cash payable if converted over the carrying amount
of the 2009 debentures was classified as temporary equity on Intel's consolidated balance sheet.
During 2013, 2015 and 2016, management approved several restructuring actions, including targeted
workforce reductions as well as exit of certain businesses and facilities. Please also refer to the 2016
Restructuring Program described above in Element B.4a.
SELECTED QUARTERLY FINANCIAL DATA
Consolidated Condensed Statements of Income:
Three Months Ended
Apr 2,
Mar 28,
2016
2015
(Dollars in Millions, Except Per Share Amounts – unaudited)
Net revenue
Gross margin
R&D
Operating income
Net income
Basic earnings per share of common stock
Diluted earnings per share of common stock
Cash dividends declared per share of common stock
Weighted average shares of common stock outstanding:
Basic
Diluted
$
$
$
$
$
$
$
$
13,702
8,130
3,246
2,568
2,046
0.43
0.42
0.52
$
$
$
$
$
$
$
$
4,722
4,875
12,781
7,730
2,995
2,615
1,992
0.42
0.41
0.48
4,741
4,914
Consolidated Condensed Balance Sheets:
Dec 26,
*
2015
Apr 2,
2016
(Amounts in millions – unaudited)
Total assets
Debt
Temporary equity
* Derived from audited consolidated balance sheet.
$
$
$
$
$
$
3,061
32,644
105,467
25,369
894
61,174
$
$
$
$
$
$
15,308
31,858
101,459
22,670
897
61,085
During the first quarter of 2016, the closing stock price conversion right condition of the 2009 debentures
continued to be met and the debentures will be convertible at the option of the holders during the second
quarter of 2016. As a result, the $1.1 billion carrying amount of the 2009 debentures was classified as
short-term debt on Intel's consolidated condensed balance sheet as of April 2, 2016 ($1.1 billion as of
December 26, 2015). The excess of the amount of cash payable if converted over the carrying amount of
the 2009 debentures of $894 million has been classified as temporary equity on Intel's consolidated
condensed balance sheet as of April 2, 2016 ($897 million as of December 26, 2015).
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10
B.8
Pro forma financial
information
Not applicable. Pursuant to its Q&A, ESMA considers that Item 20.2 of
Annex I of the Prospectus Regulation is generally not pertinent for offers
of shares to employees and can thus be omitted from the prospectus in
accordance with Article 23.4 of the Prospectus Regulation.
B.9
Profit forecast
Not applicable. This prospectus does not contain any profit forecast.
B.10
Qualifications in
the audit report on
the historical
financial
information
Not applicable. There are no such qualifications in the auditors' report.
B.11
Working capital
statement
Not applicable. Intel's working capital is sufficient for its present
requirements.
SECTION C — SECURITIES
C.1
Type and class of
the securities
being offered,
including the
security
identification code
The Shares offered pursuant to this prospectus will be newly issued
Shares. The Shares offered under the Irish Plans will be purchased on
the open market on The NASDAQ Global Select Market (“NASDAQ”).
The Shares are or will be, after their issuance, listed on the NASDAQ
under the symbol “INTC.” The CUSIP for the Shares is 458140-10-0.
C.2
Currency of the
securities issue
The United States Dollar is the currency of the securities issue.
C.3
Number of shares
issued
As of April 2, 2016, Intel was authorized to issue 10,000 million Shares
and 50 million shares of preferred stock, par value $0.001 per share. As
of April 22, 2016, there were approximately 4,722 million Shares
outstanding, and there were no shares of preferred stock outstanding.
C.4
Rights attached to
the securities
No Participant (as defined in Element E.3.1 below) shall have any voting,
dividend, or other stockholder rights with respect to any offering under the
SPP until the Shares have been purchased on behalf of the Participant.
Following such purchase, the Participant shall be entitled to the rights
attached to the Shares, as further described below:
Dividend Rights. Dividend rights are provided for in Intel’s Bylaws, as
amended and restated effective January 21, 2016 (the “Bylaws”). Under
the General Corporation Law of the State of Delaware, U.S.A. (the
“DGCL”) and subject to preferences that may apply to shares of Intel
preferred stock outstanding at the time, the holders of outstanding Shares
are entitled to receive dividends either (1) out of the surplus, or (2) in case
there shall be no such surplus, out of the Company’s net profits for the
fiscal year in which the dividend is declared and/or the preceding fiscal
year as Intel's Board of Directors (the "Board") may from time to time
determine (see Section 170 of the DGCL).
Voting Rights. Except as otherwise provided by law, only persons in
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11
whose names shares entitled to vote stand on the stock records of the
Company on the record date for determining the stockholders entitled to
vote at a meeting shall be entitled to vote at such meeting.
Right to Receive Liquidation Distributions. Upon a liquidation,
dissolution or winding-up of Intel, the assets legally available for
distribution to stockholders are distributable ratably among the holders of
Shares outstanding at that time after payment of any liquidation
preferences on any outstanding preferred stock.
No Preemptive, Redemptive or Conversion Provisions. The Shares
are not entitled to preemptive rights and are not subject to conversion or
redemption.
C.5
Transferability
restrictions
Not applicable. The Shares in this offering are registered on Form S-8
with the SEC and are generally freely transferable.
C.6
Admission to
trading on a
regulated market
Not applicable. As noted in Element C.1 above, the Shares are listed on
the NASDAQ.
C.7
Dividend policy
Intel's total dividend payments were $4.6 billion in 2015 compared to $4.4
billion in 2014 and $4.5 billion in 2013. As of December 26, 2015, Intel
has paid a cash dividend in each of the past 93 quarters. In January
2016, the Board declared a cash dividend of $0.26 per Share for first
quarter of 2016. The dividend was payable on March 1, 2016 to
stockholders of record on February 7, 2016. In March 2016, the Board
declared a cash dividend of $0.26 per Share for second quarter of 2016.
The dividend was payable on June 1, 2016 to stockholders of record on
May 7, 2016.
SECTION D — RISKS
D.1
Key risks related to
Intel or its industry
Set forth below are summaries of the key risks, uncertainties and other
factors that may affect Intel's future results. The risks and uncertainties
described below are not the only ones facing Intel.
Changes in product demand can harm Intel’s results of operation
and financial condition.
• Demand for Intel products is variable and hard to predict.
• Intel faces significant competition.
Intel operates globally and is subject to significant risks in many
jurisdictions.
• Global or regional conditions may harm Intel's financial results.
Intel operates its own fabrication facilities and, as a result, is
vulnerable to manufacturing-related risks.
• Intel is subject to risks associated with environmental laws and
3714744-v9\
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regulations.
Intel is subject to intellectual property (“IP”) risks and risks
associated with litigation and regulatory proceedings.
• Intel may be unable to enforce or protect its IP rights.
• Third parties may assert claims based on IP rights against Intel or its
products, which could harm its business.
• Intel is subject to the risks associated with litigation and regulatory
proceedings. Although management at present believes that the
ultimate outcome of these proceedings, individually and in the
aggregate, will not materially harm Intel's financial position, results of
operations, cash flows, or overall trends, legal proceedings and related
government investigations are subject to inherent uncertainties, and
unfavorable rulings or other events could occur.
Intel is subject to cybersecurity and privacy risks.
• Third parties attempt to gain unauthorized access to Intel's network,
products, services, and infrastructure.
Intel is subject to risks associated with transactions.
• Intel's acquisitions, divestitures, and other transactions could fail to
achieve strategic objectives, disrupt its ongoing business, and harm its
results of operations.
• Changes in Intel's announced restructuring plan, and other factors,
could affect its results of operations and financial condition.
D.3
Key risks related to
the shares
Participants assume the risk of any currency fluctuations at the time of (i)
their contribution to the SPP by payroll deductions and (ii) the selling of
their Shares.
SECTION E — OFFER
E.1
2
Net proceeds
2
Assuming the 16,390 eligible employees in Austria, Denmark, Finland,
France, Germany, Ireland, the Netherlands, Poland, Romania, Sweden
and the United Kingdom would purchase the maximum amount of Shares
under the SPP offered pursuant to this prospectus, that is, a total of
$42,452.46 each, then the gross proceeds to Intel in connection with the
offer under the SPP pursuant to this prospectus would be
$695,795,819.40. After deducting legal and accounting expenses in
connection with the offer, the net proceeds would be approximately
$695,695,819.40.
As of March 23, 2016, there were 539 eligible employees in Austria, 284 eligible employees in Denmark, 335 eligible
employees in Finland, 1,139 eligible employees in France, 4,007 eligible employees in Germany, 5,180 eligible employees in
Ireland, 351 eligible employees in the Netherlands, 2,271 eligible employees in Poland, 549 eligible employees in Romania,
195 eligible employees in Sweden and 1,540 eligible employees in the United Kingdom.
3714744-v9\
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The net proceeds under the Irish Plans cannot be calculated at this time
as the trustee will purchase the Shares on the open market on the
NASDAQ at the request of the Irish Participant (as defined below), and
the purchase price will be the market price per Share on the NASDAQ on
the date the Shares are purchased.
E.2a
Reasons for the
offer and use of
proceeds
The purpose of the SPP is to provide an opportunity for employees of
Intel and its designated subsidiaries (“Participating Subsidiaries”) to
purchase Shares and become stockholders in Intel, thereby to have an
additional incentive to contribute to the prosperity of the Company.
The purpose of the Irish Plans is to enable eligible employees to become
stockholders in Intel.
The net proceeds will be used for general corporate purposes.
E.3
Description of the
terms and
conditions of the
offer
Intel will offer eligible employees of the Company and certain of its
subsidiaries residing in the EEA the right to purchase its Shares, under
the SPP. Intel also will offer its employees in Ireland the right to acquire
Shares under the Irish Plans.
The offering of the SPP and/or the Irish Plans may be considered a public
offering of securities pursuant to the Prospectus Directive in the following
EEA countries, subject to the applicable legislation in each country:
Austria, Denmark, Finland, France, Germany, Ireland, the Netherlands,
Poland, Romania, Sweden and the United Kingdom. The offering of the
SPP may also be made in the following EEA countries: Belgium, Czech
Republic, Greece, Hungary, Italy, Luxembourg, Norway, Portugal and
Spain. However, such offering is not considered a public offering of
securities and/or the obligation to publish a prospectus does not apply to
the offering under the legislation implementing the Prospectus Directive in
such countries. The total amount of the offering of the SPP and the Irish
Plans in the EEA is more than €5 million over a 12-month period.
This prospectus will be made available to employees of the subsidiaries
of Intel based in the above-named countries where the offering of the
SPP and/or the Irish Plans may be considered a public offering of
securities at the respective head offices of their employers.
E.3.1
The SPP
Under the SPP, eligible employees of Intel and the Participating
Subsidiaries are offered a right to purchase Shares at a discount with
funds deducted from the employees’ eligible compensation. The SPP is
administered by the Compensation Committee (the “Committee”) of the
Board. The Committee has granted the authority for day-to-day
administration of the SPP and the authority to designate the Participating
Subsidiaries to the Company’s Senior Vice President of Human
Resources.
The SPP is composed of enrollment periods that vary in duration by
country (“Enrollment Periods”) and during which eligible employees may
elect to participate in the following six-month purchase period
(“Subscription Period”). Generally, eligible employees offered participation
in the SPP may decide to enroll in the SPP (“Participants”) by completing
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14
and submitting a subscription agreement form provided by Intel by the
deadline prescribed by the Committee prior to a Subscription Period (the
“Enrollment Date”).
Subscription Periods commence on each February 20 and August 20,
and end on the last trading day in the six-month periods ending on the
following August 19 and February 19, respectively, or on such other date
as the Committee shall determine.
The Enrollment Periods covered by this prospectus are the following:
•
•
For the Subscription Period from August 20, 2016 through
February 19, 2017:
o
July 1 to July 31, 2016 for eligible employees of Intel and
Altera in Austria, Denmark, Finland, France, Germany,
Ireland, the Netherlands, Poland, Romania, Sweden and
the United Kingdom.
o
July 1 to August 12, 2016 for eligible employees of Wind
River Systems, Inc. ("Wind River") subsidiaries (for all
countries).
For the Subscription Period from February 20 through August 19,
2017:
o
January 1 to January 31, 2017 for eligible employees
Intel and Altera in Austria, Denmark, Finland, France,
Germany, Ireland, the Netherlands, Poland, Romania,
Sweden and the United Kingdom.
o
January 1 to February 12, 2017 for eligible employees of
Wind River subsidiaries (for all countries).
The last day of each Enrollment Period indicated above is the Enrollment
Date for the related Subscription Period.
Once enrolled, Participants may purchase Shares at a discount on the
last trading day of each Subscription Period (the “Purchase Date”).
Participation is limited to (i) Shares having a market value on the
applicable Commencement Date (as defined below) of not more than
$25,000 per calendar year, (ii) employees possessing less than 5% of
Intel voting shares or value of all classes of Intel stock and (iii) 72,000
Shares per Subscription Period.
During each Enrollment Period, Participants may elect to contribute to the
SPP through payroll deductions of any whole percentage between 2%
and 5% of their eligible compensation as indicated on their subscription
agreement forms. Participants’ participation in the SPP and payroll
deductions will continue until they withdraw from the SPP, become
ineligible to participate or terminate employment. A Participant may only
decrease their rate of payroll deductions, and only once, during a
Subscription Period, and may change their rate of payroll deductions for
the next Subscription Period by submitting the prescribed form at the time
and manner specified by the Committee. In addition, a Participant may
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15
withdraw from the SPP by submitting a withdrawal and refund of money
form at the time and manner specified by the Committee.
The accumulated payroll deductions are used to purchase Shares at the
end of each six-month Subscription Period. The purchase price per Share
is 85% (or such higher percentage designated by the Committee) of the
lower of (1) the market value of a Share on the last trading day before
February 1 for the Subscription Period beginning on February 20 and
August 1 for the Subscription Period beginning on August 20 (the
“Commencement Date”) or (2) the market value of a Share on each
Purchase Date (the “Purchase Price”).
There is no charge to Participants for the acquisition or holding of Shares
under the SPP. Participants may also elect for their Shares to
automatically be sold one to two days after the Purchase Date.
Participants assume the risk of any currency fluctuations at the time of (i)
their contribution to the SPP by payroll deductions and (ii) the selling of
their Shares.
The SPP was initially approved by Intel’s stockholders at the
stockholders’ meeting held on May 17, 2006 and has been amended from
time to time. The most recent stockholder approved amendment was to
extend the term of the SPP to 2021. This amendment was approved by
the Board on March 18, 2015 and by the stockholders on May 21, 2015.
On January 20, 2016, the Committee approved amendments to the SPP,
none of which required stockholder approval. The main amendments
were made to facilitate SPP offerings to employees and subsidiaries
outside the U.S. (e.g., broadening the eligibility to seasonal and part-time
employees) and realign the Enrollment Periods worldwide. Other formal
and technical changes were made (such as eliminating the carry forward
of unused payroll deductions). The amendments are anticipated to go
into effect on January 1, 2017. The employees will be informed
accordingly.
As of April 2, 2016, there were approximately 172 million Shares available
for issuance under the SPP on a worldwide basis (out of a maximum 373
million Shares available under the SPP).
E.3.2
The Irish Plans
Eligible employees are offered participation in the Irish Plans, which are
stock purchase plans, and may decide to enroll (the “Irish Participant”) by
completing the enrollment process. To be eligible, an employee must be
employed in Ireland by Intel Ireland on the relevant qualifying date.
The Intel Ireland Profit Sharing Scheme is offered to eligible employees of
Intel Ireland Limited, and Intel Shannon Profit Sharing Scheme is offered
to eligible employees of Intel Research and Development Ireland Ltd.
Irish Participants can also elect to participate in the SPP.
The Irish Plans allow employees to use annual bonus money paid each
February ("Annual Performance Bonus" or "APB") and contributions from
Intel’s Quarterly Profit Bonus (the "QPB") to buy Shares. Under the QPB,
Intel pays eligible employees cash bonuses each January, April, July and
October based on Intel’s profits and each eligible employee’s daily pay.
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The Irish Plans are offered to employees four times each year:
•
January - employees can decide whether to make contributions
from APB and the January QPB payment.
•
April - employees can decide whether to make contributions from
the April QPB payment.
•
July - employees can decide whether to make contributions from
the July QPB payment.
•
October - employees can decide whether to make contributions
from the October QPB payment.
Generally, full-time employees, part-time employees and interns are
eligible to participate in the QPB. Irish Revenue imposes limits on how
much employees can invest in the Irish Plans. All of the following limits
must be satisfied before Shares can be purchased on behalf of an
employee. The maximum amount of annual contributions an employee
may make to the Irish Plans is €12,700 from all bonuses (i.e., APB and
QPB). Each employee can invest an APB target of 1.01% of his or her
base pay multiplied by a payout factor as set forth in the Irish Plans, into
the Irish Plans.
Shares under the Irish Plans will be held by a trustee on the Irish
Participant’s behalf and normally cannot be sold for two years after the
date of the allocation. However, for tax-favored treatment, the Irish
Participant cannot sell the Shares before three years following purchase.
If the Irish Participant sells the Shares before three years after the date of
allocation, income tax is due on the purchase price of the Shares. The
trustee will purchase the Shares on the open market on the NASDAQ,
and the purchase price will be the market price per Share on the
NASDAQ on the date the Shares were purchased, following the payment
of the APB and the QPB referred to above. There is no charge to Irish
Participants for the acquisition or holding of Shares under the Irish Plans.
E.4
Description of
material interest to
the offer including
conflict of interests
Not applicable. There are no such interests.
E.5
Name of the entity
offering to sell the
security
Intel Corporation.
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E.6
Maximum dilution
Assuming that the Shares offered pursuant to this prospectus to the
16,390 eligible employees in Austria, Denmark, Finland, France,
Germany, Ireland, the Netherlands, Poland, Romania, Sweden and the
United Kingdom would all be newly issued Shares, the holdings of a
stockholder of Intel currently holding one percent (1%) of the total
outstanding Share capital of Intel as of April 22, 2016, that is 47,220,000
Shares, and who would not participate in the offering, would be diluted as
indicated in the following dilution table:
Before the offering (as of
April 22, 2016)
After issuance of 25,994,540
Shares under the SPP
E.7
Estimated
expenses charged
to the investor
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Percentage of the
total outstanding
Shares
Total number of
outstanding
Shares
1.00%
4,722,000,000
0.9945%
4,747,994,540
Not applicable. There are no such expenses.
18
PART II — PROSPECTUS
THE FOLLOWING INFORMATION IS NOT PART OF THE PROSPECTUS SUMMARY
SECTION A — RISK FACTORS
I.
RISKS RELATED TO INTEL’S BUSINESS AND INDUSTRY
The following risks could materially and adversely affect our business, financial condition, and results of
operations, and the trading price of our Shares could decline. These risk factors do not identify all risks
that we face; our operations could also be affected by factors that are not presently known to us or that
we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and
unknown, our past financial results may not be a reliable indicator of future performance, and historical
trends should not be used to anticipate results or trends in future periods. You should also refer to the
other information set forth in Intel's Annual Report on Form 10-K for the fiscal year ended December 26,
2015, filed with the SEC on February 12, 2016 ("Intel's Form 10-K"), including "Management’s Discussion
and Analysis of Financial Condition and Results of Operations" and our financial statements and the
related notes.
Changes in product demand can harm our results of operation and financial condition.
Demand for our products is variable and hard to predict. Changes in the demand for our products may
reduce our revenue, increase our costs, lower our gross margin percentage, or require us to write down
the value of our assets. Important factors that could lead to variation in the demand for our products
include changes in:
•
business conditions, including downturns in the computing industry, or in the global or regional
economies;
•
consumer confidence or income levels caused by changes in market conditions, including
changes in government borrowing, taxation, or spending policies; the credit market; or expected
inflation, employment, and energy or other commodity prices;
•
the level of our customers’ inventories;
•
competitive and pricing pressures, including actions taken by competitors;
•
customer product needs;
•
market acceptance and industry support of our new and maturing products; and
•
the technology supply chain, including supply constraints caused by natural disasters or other
events.
We face significant competition. The industry in which we operate is highly competitive and subject to
rapid technological and market developments, changes in industry standards, changes in customer
needs, and frequent product introductions and improvements. If we do not anticipate and respond to
these developments, our competitive position may weaken, and our products or technologies might be
uncompetitive or obsolete. In recent years, our business focus has expanded and now includes the
design and production of platforms for tablets, phones, and other devices across the compute continuum,
including products for the Internet of Things, and related services. As a result, we face new sources of
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competition, including, in certain of these market segments, from incumbent competitors with established
customer bases and greater brand recognition. To be successful, we need to cultivate new industry
relationships with customers and partners in these market segments. In addition, we must continually
improve the cost, integration, and energy efficiency of our products, as well as expand our software
capabilities to provide customers with comprehensive computing solutions. Despite our ongoing efforts,
there is no guarantee that we will achieve or maintain consumer and market demand or acceptance for
our products and services in these various market segments.
To compete successfully, we must maintain a successful R&D effort, develop new products and
production processes, and improve our existing products and processes ahead of competitors. For
example, we invest substantially in our network of manufacturing and assembly and test facilities,
including the construction of new fabrication facilities to support smaller transistor geometries and larger
wafers. Our R&D efforts are critical to our success and are aimed at solving complex problems, and we
do not expect all of our projects to be successful. We may be unable to develop and market new products
successfully, and the products we invest in and develop may not be well-received by customers. Our R&D
investments may not generate significant operating income or contribute to our future operating results for
several years, and such contributions may not meet our expectations or even cover the costs of such
investments. Additionally, the products and technologies offered by others may affect demand for, or
pricing of, our products.
If we are not able to compete effectively, our financial results will be adversely affected, including
increased costs and reduced revenue and gross margin, and we may be required to accelerate the writedown of the value of certain assets.
Changes in the mix of products sold may harm our financial results. Prices differ widely among the
platforms we offer in our various market segments due to differences in features offered or manufacturing
costs. For example, product offerings range from lower-priced and entry-level platforms, such as those
based on Intel Quark or Intel Atom processors, to higher-end platforms based on Intel Xeon and Intel
Itanium processors. If demand shifts from our higher-priced to lower-priced platforms in any of our market
segments, our gross margin and revenue would decrease. In addition, when products are introduced,
they tend to have higher costs because of initial development costs and lower production volumes relative
to the previous product generation, which can impact gross margin.
We operate globally and are subject to significant risks in many jurisdictions.
Global or regional conditions may harm our financial results. We have manufacturing, assembly and test,
R&D, sales, and other operations in many countries, and some of our business activities may be
concentrated in one or more geographic areas. Moreover, sales outside the U.S. accounted for
approximately 80% of our revenue for the fiscal year ended December 26, 2015. As a result, our
operations and our financial results, including our ability to manufacture, assemble and test, design,
develop, or sell products, may be adversely affected by a number of factors outside of our control,
including:
•
global and local economic conditions;
•
geopolitical and security issues, such as armed conflict and civil or military unrest, crime, political
instability, and terrorist activity;
•
natural disasters, public health issues, and other catastrophic events;
•
inefficient infrastructure and other disruptions, such as supply chain interruptions and large-scale
outages or unreliable provision of services from utilities, transportation, data hosting, or
telecommunications providers;
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•
government restrictions on, or nationalization of our operations in any country, or restrictions on
our ability to repatriate earnings from a particular country;
•
differing employment practices and labor issues;
•
formal or informal imposition of new or revised export and/or import and doing-business
regulations, which could be changed without notice;
•
ineffective legal protection of our IP rights in certain countries; and
•
local business and cultural factors that differ from our normal standards and practices.
We are subject to laws and regulations worldwide, which may differ among jurisdictions, affecting our
operations in areas including, but not limited to: IP ownership and infringement, tax, import and export
requirements, anti-corruption, foreign exchange controls and cash repatriation restrictions, data privacy
requirements, anti-competition, advertising, employment, environment, health, and safety. Compliance
with such requirements may be onerous and expensive, and may otherwise impact our business
operations negatively. Although we have policies, controls, and procedures designed to help ensure
compliance with applicable laws, there can be no assurance that our employees, contractors, suppliers,
and/or agents will not violate such laws or our policies. Violations of these laws and regulations could
result in fines; criminal sanctions against us, our officers, or our employees; prohibitions on the conduct of
our business; and damage to our reputation.
We may be affected by fluctuations in currency exchange rates. We are potentially exposed to adverse as
well as beneficial movements in currency exchange rates. Although most of our sales occur in U.S.
dollars, expenses may be paid in local currencies. An increase in the value of the dollar could increase
the real cost to our customers of our products in those markets outside the U.S. where we sell in dollars,
and a weakened dollar could increase the cost of expenses such as payroll, utilities, tax, and marketing
expenses, as well as overseas capital expenditures. We also conduct certain investing and financing
activities in local currencies. Our hedging programs reduce, but do not eliminate, the impact of currency
exchange rate movements; therefore, changes in exchange rates could harm our results of operations
and financial condition.
Catastrophic events or geopolitical conditions could have a material adverse effect on our operations and
financial results. Our operations or systems could be disrupted by natural disasters; geopolitical
conditions; terrorist activity; public health issues; cybersecurity incidents; interruptions of service from
utilities, transportation or telecommunications providers; or other catastrophic events. Such events could
make it difficult or impossible to manufacture or deliver products to our customers, receive production
materials from our suppliers, or perform critical functions, which could adversely affect our revenue and
require significant recovery time and expenditures to resume operations. While we maintain business
recovery plans that are intended to enable us to recover from natural disasters or other events that can
be disruptive to our business, some of our systems are not fully redundant and we cannot be sure that
our plans will fully protect us from all such disruptions.
We maintain a program of insurance coverage for a variety of property, casualty, and other risks. The
types and amounts of insurance we obtain vary depending on availability, cost, and decisions with
respect to risk retention. Some of our policies have large deductibles and broad exclusions. In addition,
one or more of our insurance providers may be unable or unwilling to pay a claim. Losses not covered by
insurance may be large, which could harm our results of operations and financial condition.
We operate our own fabrication facilities and, as a result, are vulnerable to manufacturing-related
risks.
Due to the variability in demand for our products, we may be unable to timely respond to reduce costs
when demand declines or to increase production when demand increases. Our operations have high
3714744-v9\
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costs that are either fixed or difficult to reduce in the short term, including our costs related to
manufacturing, such as facility construction and equipment, R&D, and the employment and training of a
highly skilled workforce. If product demand decreases or we fail to forecast demand accurately, we could
be required to write off inventory or record excess capacity charges, which would lower our gross margin.
Our manufacturing or assembly and test capacity could be underutilized, and we may be required to write
down our long-lived assets, which would increase our expenses. Factory-planning decisions may shorten
the useful lives of facilities and equipment and cause us to accelerate depreciation.
Conversely, if product demand increases, we may be unable to add capacity fast enough to meet market
demand. Our revenue and gross margin can also be affected by the timing of our product introductions
and related expenses, including marketing expenses.
We are subject to risks associated with the development and implementation of new manufacturing
process technology. We may not be successful or efficient in developing or implementing new production
processes. Production of integrated circuits is a complex process. We are continually engaged in the
transition from our existing process to the next-generation process technology. This consistent innovation
involves significant expense and carries inherent risks, including difficulties in designing and developing
next-generation process technologies, development and production timing delays, lower than anticipated
manufacturing yields, and product defects and errata. Disruptions in the production process can also
result from errors, defects in materials, delays in obtaining or revising operating permits and licenses,
interruption in our supply of materials or resources, and disruptions at our fabrication and assembly and
test facilities due to accidents, maintenance issues, or unsafe working conditions—all of which could
affect the timing of production ramps and yields. Production issues can lead to increased costs and may
affect our ability to meet product demand, which could adversely impact our business and the results from
operations.
We face supply chain risks. Thousands of suppliers provide materials that we use in production and other
aspects of our business. Where possible, we seek to have several sources of supply for all of those
materials. However, for certain materials, we may rely on a single or a limited number of suppliers, or
upon suppliers in a single location. In addition, consolidation among suppliers could impact the nature,
quality, availability, and pricing of the products and services available to us. The inability of suppliers to
deliver adequate supplies of production materials or other supplies could disrupt our production
processes or make it more difficult for us to implement our business strategy. Production could be
disrupted by the unavailability of resources used in production, such as water, silicon, electricity, gases,
and other materials. The unavailability or reduced availability of materials or resources may require us to
reduce production or incur additional costs, which could harm our business and results of operations.
We also rely on third-party providers to manufacture and assemble and test certain components or
products, particularly those related to networking, mobile and communications, and NAND flash memory.
If any of these third parties are unable to perform these services on a timely basis, we may encounter
supply delays or disruptions that could adversely affect our financial results.
In addition, there are regulatory and other requirements, restrictions, and requests from various
constituencies regarding sourcing practices and supplier conduct, with a trend toward expanding the
scope of materials and locations where materials originate, regulating supplier behaviors, and increasing
the required disclosures regarding such matters by public companies. Increased regulation and public
pressure in this area would cause our compliance costs to increase and could negatively affect our
reputation given that we use many materials in the manufacturing of our products and rely on many
suppliers to provide these materials, but do not directly control their procurement or employment
practices.
We are subject to the risks of product defects and errata. Product defects and errata (deviations from
published specifications) may result from problems in our product design or our manufacturing and
assembly and test processes. Components and products we purchase or license from third-party
suppliers may also contain defects.
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Costs from defects and errata could include:
•
writing off some or all of the value of inventory;
•
recalling products that have been shipped;
•
providing product replacements or modifications; and
•
defending against resulting litigation.
These costs could be large and may increase expenses and lower gross margin, and result in delay or
loss of revenue. Any product defects, errata, or other issues that we do not detect or fix could also
damage our reputation, negatively affect product demand, delay product releases, or result in legal
liability. The announcement of product defects and errata could cause customers to purchase products
from competitors as a result of possible shortages of our components or for other reasons. Any of these
occurrences could harm our business and financial results.
We are subject to risks associated with environmental laws and regulations. The manufacturing and
assembly and test of our products require the use of hazardous materials that are subject to a broad
array of environmental, health, and safety laws and regulations. Our failure to comply with these laws or
regulations could result in:
•
regulatory penalties, fines, and legal liabilities;
•
suspension of production;
•
alteration of our fabrication and assembly and test processes;
•
reputational challenges; and
•
restrictions on our operations or sales.
Our failure to manage the use, transportation, emissions, discharge, storage, recycling, or disposal of
hazardous materials could lead to increased costs or future liabilities. Our ability to expand or modify our
manufacturing capability in the future may be impeded by environmental regulations, such as air quality
and wastewater requirements. Environmental laws and regulations could also require us to acquire
pollution abatement or remediation equipment, modify product designs, or incur other expenses. Many
new materials that we are evaluating for use in our operations may be subject to regulation under
environmental laws and regulations. These restrictions could harm our business and results of operations
by increasing our expenses or requiring us to alter manufacturing and assembly and test processes.
Climate change may also pose regulatory and environmental risks that could harm our results of
operations and affect the way we conduct business. For example, climate change regulation could result
in increased manufacturing costs associated with air pollution control requirements, and increased or new
monitoring, recordkeeping, and reporting of greenhouse gas emissions. We also see the potential for
higher energy costs driven by climate change regulations if, for example, utility companies pass on their
costs to their customers. Furthermore, many of our operations are located in semi-arid regions that may
become increasingly vulnerable to prolonged droughts due to climate change. Our fabrication facilities
require significant water use and, while we recycle and reuse a portion of the water used, we may have
difficulties obtaining sufficient water to fulfill our operational needs due the lack of available infrastructure.
We are subject to IP risks and risks associated with litigation and regulatory proceedings.
We may be unable to enforce or protect our IP rights. We regard our patents, copyrights, trade secrets,
and other IP rights as important to the success of our business. We rely on IP law as well as
3714744-v9\
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confidentiality and licensing agreements with our customers, employees, technology development
partners, and others to protect our IP rights. Our ability to enforce these rights is subject to general
litigation risks, as well as uncertainty as to the enforceability of our IP rights in various countries. When we
seek to enforce our rights, we may be subject to claims that the IP rights are invalid, not enforceable, or
licensed to the opposing party. Our assertion of IP rights may result in the other party seeking to assert
claims against us, which could harm our business. Governments may adopt regulations—and
governments or courts may render decisions—requiring compulsory licensing of IP rights, or governments
may require products to meet standards that serve to favor local companies. Our inability to enforce our
IP rights under any of these circumstances may harm our competitive position and business. In addition,
the theft or unauthorized use or publication of our trade secrets and other confidential business
information could harm our competitive position and reduce acceptance of our products; as a result, the
value of our investment in R&D, product development, and marketing could be reduced.
Our licenses with other companies and participation in industry initiatives may allow competitors to use
our patent rights. Companies in our industry often bilaterally license patents between each other to settle
disputes or as part of business agreements. Our competitors may have licenses to our patents, and under
current case law, some of the licenses may exhaust our patent rights as to licensed product sales under
some circumstances. Our participation in industry standards organizations or with other industry initiatives
may require us to license our patents to companies that adopt industry-standard specifications.
Depending on the rules of the organization, we might have to grant these licenses to our patents for little
or no cost, and as a result, we may be unable to enforce certain patents against others, our costs of
enforcing our licenses or protecting our patents may increase, and the value of our IP rights may be
impaired.
Third parties may assert claims based on IP rights against us or our products, which could harm our
business. We may face claims based on IP rights from individuals and companies, including those who
have acquired patent portfolios to assert claims against other companies. We are normally engaged in a
number of litigation matters involving IP rights. Claims that our products or processes infringe the IP rights
of others, whether or not meritorious, could cause us to incur large costs to respond to, defend, and
resolve, and they may divert the efforts and attention of management and technical personnel. In
addition, we may face claims based on the theft or unauthorized use or disclosure of third-party trade
secrets and other confidential business information or end-user data that we obtain in conducting our
business. Any such incidents and claims could severely disrupt our business, and we could suffer losses,
including the cost of product recalls and returns, and reputational harm. Furthermore, we have agreed to
indemnify customers for certain IP rights claims against them. As a result of IP rights claims, we could:
•
pay monetary damages, including payments to satisfy indemnification obligations;
•
stop manufacturing, using, selling, offering to sell, or importing products or technology subject to
claims;
•
develop other products or technology not subject to claims, which could be time-consuming or
costly; and/or
•
enter into settlement and license agreements, which agreements may not be available on
commercially reasonable terms.
These IP rights claims could harm our competitive position, result in expenses, or require us to impair our
assets. If we alter or stop production of affected items, our revenue could be harmed.
We rely on access to third-party IP, which may not be available to us on commercially reasonable terms
or at all. Many of our products include third-party IP and/or implement industry standards, which may
require licenses from third parties. Based on past experience and industry practice, we believe such
licenses generally can be obtained on commercially reasonable terms. However, there is no assurance
that the necessary licenses can be obtained on acceptable terms or at all. Failure to obtain the right to
3714744-v9\
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use third-party IP, or to use such IP on commercially reasonable terms, could preclude us from selling
certain products or otherwise have a material adverse impact on our financial condition and operating
results.
We are subject to the risks associated with litigation and regulatory proceedings. We may face legal
claims or regulatory matters involving stockholder, consumer, competition, and other issues on a global
basis. As described in Part II - Section B.6.3 of this prospectus, we are engaged in a number of litigation
and regulatory matters. Litigation and regulatory proceedings are inherently uncertain, and adverse
rulings could occur, including monetary damages, or an injunction stopping us from manufacturing or
selling certain products, engaging in certain business practices, or requiring other remedies, such as
compulsory licensing of patents. An unfavorable outcome may result in a material adverse impact on our
business, results of operations, financial position, and overall trends. In addition, regardless of the
outcome, litigation can be costly, time-consuming, disruptive to our operations, and distracting to
management.
We must attract, retain, and motivate key employees.
To be competitive, we must attract, retain, and motivate executives and other key employees. Hiring and
retaining qualified executives, scientists, engineers, technical staff, and sales representatives are critical
to our business, and competition for experienced employees can be intense. To help attract, retain, and
motivate qualified employees, we use share-based and other performance-based incentive awards such
as restricted stock units ("RSUs") and cash bonuses. If our share-based or other compensation programs
cease to be viewed as competitive and valuable benefits, our ability to attract, retain, and motivate
employees could be weakened, which could harm our results of operations.
We are subject to cybersecurity and privacy risks.
Third parties attempt to gain unauthorized access to our network, products, services, and infrastructure.
We regularly face attempts by others to gain unauthorized access through the Internet or to introduce
malicious software to our information technology ("IT") systems. Additionally, malicious hackers may
attempt to gain unauthorized access and corrupt the processes of hardware and software products that
we manufacture and services we provide. Due to the widespread use of our products and the high profile
of our commercial security products, we or our products and services are a frequent target of computer
hackers and organizations that intend to sabotage, take control of, or otherwise corrupt our manufacturing
or other processes, products, and services. We are also a target of malicious attackers who attempt to
gain access to our network or data centers or those of our customers or end users; steal proprietary
information related to our business, products, employees, and customers; or interrupt our systems and
services or those of our customers or others. We believe such attempts are increasing in number and in
technical sophistication. From time to time, we encounter intrusions or unauthorized access to our
network, products, services, or infrastructure. To date, none have resulted in any material adverse impact
to our business or operations. In some instances, we, our customers, and the users of our products and
services might be unaware of an incident or its magnitude and effects. While we seek to detect and
investigate all unauthorized attempts and attacks against our network, products, and services, and to
prevent their recurrence where practicable through changes to our internal processes and tools and/or
changes or patches to our products and services, we remain potentially vulnerable to additional known or
unknown threats. Such incidents, whether successful or unsuccessful, could result in our incurring
significant costs related to, for example, rebuilding internal systems, reduced inventory value, providing
modifications to our products and services, defending against litigation, responding to regulatory inquiries
or actions, paying damages, or taking other remedial steps with respect to third parties. In addition, these
threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or
implementing adequate preventative measures. Publicity about vulnerabilities and attempted or
successful incursions could damage our reputation with customers or users, and reduce demand for our
products and services.
We may be subject to theft, loss, or misuse of personal data about our employees, customers, or other
third parties, which could increase our expenses, damage our reputation, or result in legal or regulatory
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proceedings. The theft, loss, or misuse of personal data collected, used, stored, or transferred by us to
run our business could result in significantly increased security costs or costs related to defending legal
claims. Global privacy legislation, enforcement, and policy activity in this area are rapidly expanding and
creating a complex regulatory compliance environment. Costs to comply with and implement these
privacy-related and data protection measures could be significant. In addition, even our inadvertent failure
to comply with federal, state, or international privacy-related or data protection laws and regulations could
result in proceedings against us by governmental entities or others.
We are subject to risks associated with transactions.
We invest in companies for strategic reasons and may not realize a return on our investments. We make
investments in public and private companies around the world to further our strategic objectives and
support key business initiatives. Many of the instruments in which we invest are non-marketable at the
time of our initial investment. Companies in which we invest range from early-stage companies still
defining their strategic direction to mature companies with established revenue streams and business
models. The success of our investment in any company is typically dependent on the availability to the
company of additional funding on favorable terms, or a liquidity event, such as a public offering or
acquisition. If any of the companies in which we invest fail, we could lose all or part of our investment. If
we determine that an other-than-temporary decline in the fair value exists for an investment, we write
down the investment to its fair value and recognize a loss.
Our acquisitions, divestitures, and other transactions could fail to achieve strategic objectives, disrupt our
ongoing business, and harm our results of operations. In pursuing our business strategy, we routinely
conduct discussions, evaluate opportunities, and enter into agreements for possible acquisitions,
divestitures, and other transactions, such as joint ventures. Given that our resources are limited, our
decision to complete an acquisition has opportunity costs and we may need to forgo the prospect of
acquiring other companies or technologies that could help us achieve our strategic objectives. In addition
to opportunity costs, these transactions involve large challenges and risks, including risks that:
•
the transaction may not advance our business strategy;
•
we may be unable to identify opportunities on terms acceptable to us;
•
we may not realize a satisfactory return;
•
we may experience disruption of our ongoing operations;
•
we may be unable to retain key personnel;
•
we may experience difficulty in integrating new employees, business systems, and technology;
•
acquired businesses may not have adequate controls, processes, and procedures to ensure
compliance with laws and regulations, and our due diligence process may not identify compliance
issues or other liabilities;
•
we may have difficulty entering new market segments;
•
we may be unable to retain the customers and partners of acquired businesses; and/or
•
there may be unknown, underestimated, and/or undisclosed commitments or liabilities.
When we decide to sell assets or a business, we may have difficulty selling on acceptable terms in a
timely manner, and the agreed-upon terms and financing arrangements could be renegotiated due to
changes in business or market conditions. These circumstances could delay the achievement of our
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strategic objectives or cause us to incur additional expense, or we may sell a business at a price or on
terms that are less favorable than we had anticipated, resulting in a loss on the transaction.
If we do enter into agreements with respect to acquisitions, divestitures, or other transactions, we may fail
to complete them due to factors such as:
•
failure to obtain regulatory or other approvals;
•
IP disputes or other litigation; or
•
difficulties obtaining financing for the transaction.
We are subject to sales-related risks.
We face risks related to sales through distributors and other third parties. We sell a significant portion of
our products through third parties such as distributors, value-added resellers, OEMs, ODMs, Internet
service providers, and channel partners (collectively referred to as distributors). Using third parties for
distribution exposes us to many risks, including competitive pressure, concentration, credit risk, and
compliance risks. Distributors may sell products that compete with our products, and we may need to
provide financial and other incentives to focus distributors on the sale of our products. We may rely on
one or more key distributors for a product, and the loss of these distributors could reduce our revenue.
Distributors may face financial difficulties, including bankruptcy, which could harm our collection of
accounts receivable and financial results. Violations of the Foreign Corrupt Practices Act or similar laws
by distributors or other third-party intermediaries could have a material impact on our business. Failure to
manage risks related to our use of distributors may reduce sales, increase expenses, and weaken our
competitive position.
We face risks related to business transactions with U.S. government entities. We receive proceeds from
services and products we provide to the U.S. government. U.S. government demand and payment may
be affected by public sector budgetary cycles and funding authorizations. U.S. government contracts are
subject to oversight, including special rules on accounting, IP rights, expenses, reviews, information
handling, and security. Failure to comply with these rules could result in civil and criminal penalties and
sanctions, including termination of contracts, fines, and suspensions, or debarment from future U.S.
government business.
Our results of operations could vary as a result of the methods, estimates, and judgments that we
use in applying accounting policies.
The methods, estimates, and judgments that we use in applying accounting policies have a large impact
on our results of operations. For more information, see "Critical Accounting Estimates" in Part II, Item 7 of
Intel's Form 10-K. These methods, estimates, and judgments are subject to large risks, uncertainties, and
assumptions, and changes could affect our results of operations.
Changes in our effective tax rate may reduce our net income.
A number of factors may increase our effective tax rates, which could reduce our net income, including:
•
the jurisdictions in which profits are determined to be earned and taxed;
•
the resolution of issues arising from tax audits;
•
changes in the valuation of our deferred tax assets and liabilities, and in deferred tax valuation
allowances;
•
adjustments to income taxes upon finalization of tax returns;
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•
increases in expenses not deductible for tax purposes, including impairments of goodwill;
•
changes in available tax credits;
•
changes in tax laws or their interpretation, including changes in the U.S. to the taxation of
manufacturing enterprises and of non-U.S. income and expenses;
•
changes in U.S. generally accepted accounting principles; and
•
our decision to repatriate non-U.S. earnings for which we have not previously provided for U.S.
taxes.
We may have fluctuations in the amount and frequency of our stock repurchases.
The amount, timing, and execution of our stock repurchase program may fluctuate based on our priorities
for the use of cash for other purposes—such as investing in our business, including operational spending,
capital spending, and acquisitions, and returning cash to our stockholders as dividend payments—and
because of changes in cash flows and changes in tax laws.
Workforce restructuring actions may be disruptive to our operations and adversely affect our
financial results.
In response to the business environment and to accomplish our strategic objectives, from time to time we
may restructure our operations or make other adjustments to our workforce. Such workforce changes can
result in restructuring charges in addition to those described in "Note 13: Restructuring and Asset
Impairment Charges" in Part II, Item 8 of Intel's Form 10-K, and "Note 12. Restructuring and Asset
Impairment Charges" in Part I, Item 1 of Intel's Form 10-Q. Such workforce changes can also temporarily
reduce workforce productivity, which could be disruptive to our business and adversely affect our results
of operations. In addition, we may not achieve or sustain the expected cost savings or other benefits of
our restructuring plans, or do so within the expected time frame.
Changes in our announced restructuring plan, and other factors, could affect our results of
operations and financial condition.
Factors that could cause actual results to differ materially from our expectations with regard to our
announced 2016 Restructuring Program include:
•
timing and execution of plans and programs that may be subject to local labor law requirements,
including consultation with appropriate works councils;
•
assumptions related to severance, post-retirement, and relocation costs;
•
future acquisitions, dispositions, or investments;
•
new business initiatives and changes in product roadmap, development, and manufacturing;
and/or
•
assumptions related to cost savings, product demand, operating efficiencies.
There are inherent limitations on the effectiveness of our controls.
We do not expect that our disclosure controls or our internal control over financial reporting will prevent or
detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide
only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a
control system must reflect the fact that resource constraints exist, and the benefits of controls must be
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considered relative to their costs. Further, because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, have been detected. The design of any
system of controls is based in part on certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to
risks. Over time, controls may become inadequate due to changes in conditions or deterioration in the
degree of compliance with policies or procedures. If our controls become inadequate, we could fail to
meet our financial reporting obligations, our reputation may be adversely affected, our business and
operating results could be harmed, and the market price of our stock could decline.
II.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are affected by changes in currency exchange rates, interest rates, and equity prices. All of the
following potential changes are based on sensitivity analyses performed on our financial positions as of
April 2, 2016, December 26, 2015, and December 27, 2014. Actual results may differ materially.
2.1
Currency Exchange Rates
In general, we economically hedge currency risks of non-U.S.-dollar-denominated investments in debt
instruments and loans receivable with currency forward contracts or currency interest rate swaps. Gains
and losses on these non-U.S.-currency investments are generally offset by corresponding gains and
losses on the related hedging instruments.
Substantially all of our revenue is transacted in U.S. dollars. However, a significant portion of our
operating expenditures and capital purchases are incurred in or exposed to other currencies, primarily the
euro, the Chinese yuan, the Japanese yen, and the Israeli shekel. We have established balance sheet
and forecasted transaction currency risk management programs to protect against fluctuations in the fair
value and the volatility of the functional currency equivalent of future cash flows caused by changes in
exchange rates. We generally utilize currency forward contracts in these hedging programs. These
programs reduce, but do not eliminate, the impact of currency exchange movements. For further
information, see "Risks Related to Intel's Business and Industry" in Part I, Section A of this prospectus.
We considered the historical trends in currency exchange rates and determined that it was reasonably
possible that a weighted average adverse change of 20% in currency exchange rates could be
experienced in the near term. Such an adverse change, after taking into account balance sheet hedges
only and offsetting recorded monetary asset and liability positions, would have resulted in an adverse
impact on income before taxes of less than $75 million as of December 26, 2015 (less than $50 million as
of December 27, 2014).
2.2
Interest Rates
We generally hedge interest rate risks of fixed-rate debt investments with interest rate swaps, and we
may elect to hedge interest rate risks of our indebtedness. Gains and losses on these instruments are
generally offset by corresponding losses and gains on the related hedging instruments.
We are exposed to interest rate risk related to our investment portfolio and debt issuances. The primary
objective of our investments in debt instruments is to preserve principal while maximizing yields, which
generally track the U.S. dollar three-month LIBOR. A hypothetical decrease in benchmark interest rates of
up to 1.0%, after taking into account investment hedges, would have resulted in an increase in the fair
value of our investment portfolio of approximately $15 million as of December 26, 2015 (an increase of
approximately $10 million as of December 27, 2014). After taking into account interest rate and currency
swaps, a hypothetical decrease in interest rates of up to 1.0% would have resulted in an increase in the
fair value of our indebtedness of approximately $1.6 billion as of December 26, 2015 (an increase of
approximately $1.0 billion as of December 27, 2014). The increase from December 27, 2014 was
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primarily driven by the inclusion of $9.5 billion of senior unsecured notes issued in Q3 and Q4 2015. The
fluctuations in fair value of our investment portfolio and indebtedness reflect only the direct impact of the
change in interest rates. Other economic variables, such as equity market fluctuations and changes in
relative credit risk, could result in a significantly higher decline in the fair value of our net investment
position. For further information on how credit risk is factored into the valuation of our investment portfolio
and debt issuances, see "Note 4: Fair Value" in Part II, Item 8 of Intel's Form 10-K.
2.3
Equity Prices
Our investments include marketable equity securities and equity derivative instruments. We typically do
not attempt to reduce or eliminate our equity market exposure through hedging activities at the inception
of our investments. Before we enter into hedge arrangements, we evaluate legal, market, and economic
factors, as well as the expected timing of disposal to determine whether hedging is appropriate. Our
equity market risk management program may include equity derivatives with or without hedge accounting
designation that utilize warrants, equity options, or other equity derivatives.
We also utilize total return swaps to offset changes in liabilities related to the equity market risks of certain
deferred compensation arrangements. Gains and losses from changes in fair value of these total return
swaps are generally offset by the losses and gains on the related liabilities.
As of April 2, 2016, the fair value of our marketable equity investments and our equity derivative
instruments, including hedging positions, was $6.4 billion ($6.0 billion as of December 26, 2015).
Substantially all of our marketable equity investments portfolio as of April 2, 2016, was concentrated in
our investment in ASML Holding N.V. ("ASML") of $6.3 billion ($5.7 billion as of December 26, 2015). Our
marketable equity method investments are excluded from our analysis, as the carrying value does not
fluctuate based on market price changes unless an other-than-temporary impairment is deemed
necessary. To determine reasonably possible decreases in the market value of our marketable equity
investments, we have analyzed the historical market price sensitivity of our marketable equity investment
portfolio. Assuming a decline of 30% in market prices, and after reflecting the impact of hedges and
offsetting positions, the aggregate value of our marketable equity investments could decrease by
approximately $2.0 billion, based on the value as of April 2, 2016 (a decrease in value of approximately
$1.8 billion, based on the value as of December 26, 2015 using an assumed decline of 30%).
Many of the same factors that could result in an adverse movement of equity market prices affect our
non-marketable equity investments, although we cannot always quantify the impact directly. Financial
markets are volatile, which could negatively affect the prospects of the companies we invest in, their
ability to raise additional capital, and the likelihood of our ability to realize value in our investments
through liquidity events such as initial public offerings, mergers, and private sales. These types of
investments involve a great deal of risk, and there can be no assurance that any specific company will
grow or become successful; consequently, we could lose all or part of our investment. Our nonmarketable cost method equity investments had a carrying amount of $2.9 billion as of April 2, 2016 ($2.9
billion as of December 26, 2015) and included our Beijing UniSpreadtrum Technology Ltd.
("UniSpreadtrum") and Cloudera investments of $966 million and $454 million, respectively ($966 million
and $454 million for UniSpreadtrum and Cloudera, respectively, as of December 26, 2015). The carrying
amount of our non-marketable equity method investments was $1.6 billion as of April 2, 2016 ($1.6 billion
as of December 26, 2015). A majority of our non-marketable equity method investments balance as of
April 2, 2016 was concentrated in our MFT and Cloudera investments of $872 million and $250 million,
respectively ($872 million and $256 million for IMFT and Cloudera, respectively, as of December 26,
2015).
2.4
Commodity Price Risk
Although we operate facilities that consume commodities, we are not directly affected by commodity price
risk to a material degree. We have established forecasted transaction risk management programs to
protect against fluctuations in the fair value and the volatility of future cash flows caused by changes in
commodity prices. In addition, we have sourcing plans in place for our key commodities that mitigate the
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risk of a potential supplier concentration. For further information on commodity price risk, see "Note 6:
Derivative Financial Instruments" in Part II, Item 8 of Intel's Form 10-K.
SECTION B — SUPPLEMENTAL INFORMATION CONCERNING INTEL CORPORATION AND THE
SPP
I.
THE OUTLINE
1.1
Purpose of the SPP
The purpose of the SPP is to provide an opportunity for eligible employees of Intel and its Participating
Subsidiaries to purchase Shares of Intel and thereby to have an additional incentive to contribute to the
prosperity of Intel.
1.2
Shares Offered Under the SPP
A total of 373 million Shares are currently reserved for issuance under the SPP. As of April 2, 2016,
approximately 172 million Shares remain available for future issuance, representing 3.64% of the
approximately 4,722 million Shares outstanding as of April 22, 2016. Such number is subject to
adjustments effected in accordance with the SPP. Each Share has a par value of $0.001.
Subject to certain limited exceptions set forth in the SPP and as described in more detail below, on the
Commencement Date (as provided in Section 1.4 below) of each Subscription Period (as provided in
Section 1.3 below), each Participant in such Subscription Period shall be granted a subscription right
consisting of an option to purchase on the last trading day of each Subscription Period (the “Purchase
Date”) the number of whole Shares obtained by dividing the aggregate amount of the Participant’s
accumulated payroll deductions in his or her SPP account on the last Purchase Date by the applicable
Purchase Price (as provided in Section 1.4 below).
No subscription right will be granted on a Commencement Date to any person who is not, on such
Commencement Date, an eligible employee (as provided in Section 2 below). No Participant may
purchase more than 72,000 Shares in a given Subscription Period. If the number of Shares to be
credited to a Participant’s SPP account exceeds this limit, the Participant’s SPP account will be credited
with the maximum number of Shares permissible, and any accumulated payroll deductions not used to
purchase Shares will be refunded in cash to the Participant. Notwithstanding any provision of the SPP to
the contrary, no subscription right will entitle a Participant to purchase Shares under the SPP at a rate
which, when aggregated with such Participant's rights to purchase Shares under all other employee stock
purchase plans of Intel or any of its subsidiaries intended to meet the requirements of Section 423 of the
U.S. Internal Revenue Code of 1986, as amended (the “Code”), exceeds $25,000 in market value (or
such other limit, if any, as may be imposed by the Code) for each calendar year in which such
subscription right has been outstanding at any time. For purposes of the preceding sentence, the market
value of Shares purchased during a given Subscription Period will be determined as of the
Commencement Date for such Subscription Period.
If there is any change in the number of outstanding Shares because of a merger, consolidation, spin-off,
reorganization, recapitalization, dividend in property other than cash, stock split, reverse stock split, stock
dividend, liquidating dividend, combination, reclassification of the Shares (including any such change in
the number of Shares effected in connection with a change in the Company's domicile) or any similar
change in the capital structure of the Company, equitable adjustments will be made in the number of
Shares subject to the SPP and each outstanding subscription right and in the Purchase Price, as
determined by the Board, in its sole discretion. The adjustments determined by the Board shall be
binding and conclusive on Participants and on any other persons claiming rights under the SPP.
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In the event of the proposed liquidation or dissolution of Intel, the Subscription Period will terminate
immediately before such proposed transaction closes (unless otherwise provided by the Board in its sole
discretion), all outstanding subscription rights will automatically terminate and all accumulated payroll
deductions will be refunded without interest to the Participants.
In the event of a proposed sale of all or substantially all of Intel’s assets, or the merger or consolidation or
similar combination of Intel with or into another entity, then in the sole discretion of the Board, one of the
following will be implemented, (1) each subscription right shall be assumed or substituted by the
successor corporation or its parent or subsidiary, (2) all outstanding subscription rights shall be
automatically exercised on a date established by the Board that is to be treated as a Purchase Date on or
before the date of closing of such transaction, (3) all outstanding subscription rights shall terminate and
the accumulated payroll deductions will be refunded without interest to the Participants, or (4) outstanding
subscription rights shall remain unchanged.
1.3
Subscription Period
The SPP is generally implemented by a series of six-month Subscription Periods, with new Subscription
Periods commencing on each February 20 and August 20, and ending on the last trading day in the sixmonth periods ending on the following August 19 and February 19, respectively, or on such other date as
the Committee shall determine.
1.4
Purchase Price
The Purchase Price for a Subscription Period will be the lower of (1) 85% (or such higher percentage
designated by the Committee) of the “market value” of the Shares on the last trading day before February
1 for the Subscription Period beginning on February 20 and August 1 for the Subscription Period
beginning on August 20 (the “Commencement Date”) or (2) 85% (or such higher percentage designated
by the Committee) of the “market value” of the Shares on the last day of the Subscription Period (the
“Purchase Date”). “Market value” is the average of the highest and lowest selling price reported on
NASDAQ on the applicable date. The Committee may change the percentage of market value applied to
determine the Purchase Price with respect to any future Subscription Period, but not to below 85%, and
the Committee may determine with respect to any future Subscription Period that the Purchase Price will
be a percentage of the market value of the Shares on the last day of the Subscription Period.
1.5
Purchase of Shares
On each Purchase Date of a Subscription Period, each Participant who has not withdrawn from the SPP
and whose participation in the offering has not terminated before such Purchase Date, will automatically
purchase the number of whole Shares determined by dividing (a) the aggregate amount of the
Participant's payroll deductions accumulated in the Participant's SPP account during the Subscription
Period and not previously applied toward the purchase of Shares by (b) the Purchase Price for that
Subscription Period. No fractional Shares will be credited or issued to a Participant's account. If the
aggregate number of Shares subscribed for in any Subscription Period exceeds the number of Shares
that remain available for sale under the SPP, the number of Shares each Participant may purchase will
be proportionately reduced. Subject to the other limitations in the SPP, no Participant may purchase
more than 72,000 Shares in a Subscription Period. If the number of whole Shares to be credited to a
Participant’s SPP account in a Subscription Period exceeds this limit, the Participant’s SPP account will
be credited with the maximum number of Shares permissible, and any accumulated payroll deductions
not used to purchase Shares will be refunded in cash without interest.
Any cash balance remaining in a Participant's SPP account following any Purchase Date will be refunded
to the Participant as soon as practicable after such Purchase Date. However, if the cash to be returned
to a Participant is an amount which is insufficient to purchase an additional whole Share on such
Purchase Date, the Committee may in its discretion direct Intel to retain such amount in the Participant's
SPP account to be applied toward the purchase of Shares in the subsequent Subscription Period;
however, after the effective date of the SPP amendments approved by the Board on January 20, 2016
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(as provided in Section 1.7 below), such amounts will be refunded to the Participant and will not be
carried forward.
1.6
Term of the SPP
The SPP will continue in effect until August 31, 2021, unless it is earlier terminated by the Board.
1.7
Termination or Amendment of the SPP
The Board may amend, modify or terminate the SPP at any time without notice, provided that no
amendment may be adopted without the approval of the stockholders that would increase the total
number of Shares subject to the SPP (except for recapitalization) or adopt other amendments for which
stockholder approval is required under applicable law.
The SPP was initially approved by Intel’s stockholders at the stockholders’ meeting held on May 17,
2006, and has been amended from time to time. The most recent stockholder approved amendment was
to extend the term of the SPP to 2021. This amendment was approved by the Board on March 18, 2015,
and by the stockholders on May 21, 2015. On January 20, 2016, the Committee approved amendments
to the SPP, none of which required stockholder approval. The main amendments were made to facilitate
SPP offerings to employees and subsidiaries outside the U.S. (e.g., broadening the eligibility to seasonal
and part-time employees) and to realign the Enrollment Periods worldwide. Other formal and technical
changes were made (such as eliminating the carry forward of unused payroll deductions).The
amendments are anticipated to go into effect on January 1, 2017. The employees will be informed
accordingly.
II.
ELIGIBILITY
2.1
Eligible Employees
Employees of Intel and certain of its subsidiaries are eligible to participate in the SPP. The subsidiaries
whose employees are entitled to participate (the “Participating Subsidiaries”) may be changed from time
to time by the Committee. The discretion in determining which subsidiaries will be Participating
Subsidiaries has been delegated by the Committee to the Company's Senior Vice President of Human
Resources.
Employees of Intel and Participating Subsidiaries who were employed on the Commencement Date
before an Enrollment Period begins are generally eligible to participate in the SPP and will be deemed an
eligible employee. However, employees are not eligible to participate in the SPP if they would
immediately after the Purchase Date of a Subscription Period own (directly or indirectly) stock, which
when added to Shares that the employees may purchase under subscription rights under the SPP,
amounts to 5% or more of the total combined voting power or value of all classes of stock of Intel. In
addition, the Committee may establish administrative rules requiring that employment commence some
minimum period (not to exceed 30 days) before an Enrollment Period begins.
Employees may not purchase Shares under the SPP in any one calendar year in which the right to
purchase Shares has been outstanding at any time in an amount which, when added to Shares the
employees are entitled to purchase under similar plans, exceeds $25,000 in market value (determined
when rights to participate arise).
2.2
Participation of Eligible Employees
An eligible employee who wants to enroll and participate in the SPP must file a completed subscription
agreement form (which includes a payroll deduction authorization) with Intel or its participating
subsidiaries with the regional stock plan administrators during an Enrollment Period. In the U.S., the
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Enrollment Period currently is February 1 through February 19 for the Subscription Period beginning
February 20, and the Enrollment Period currently is August 1 through August 19 for the Subscription
Period beginning August 20. For all Wind River subsidiaries, the Enrollment Period is from January 1
through February 12 for the Subscription Period beginning February 20, and the Enrollment Period is July
1 through August 12 for the Subscription Period beginning August 20. For all other subsidiaries in
Austria, Denmark, Finland, France, Germany, Ireland, the Netherlands, Poland, Romania, Sweden and
the United Kingdom, the Enrollment Period is January 1 through January 31 for the Subscription Period
beginning February 20, and the Enrollment Period is July 1 through July 31 for the Subscription Period
beginning August 20. As detailed in Section 1.7 and E.3 above, the Committee approved an amendment
to the SPP to realign the Enrollment Periods worldwide .
The subscription agreement form authorizes Intel, Wind River or Altera to withhold automatically a whole
percentage of a Participant’s eligible compensation (as defined in Section 2.3 below) through regular
payroll deductions, and the amount of the deduction is credited to a SPP account in the participant’s
name on Intel’s, Wind River’s or Altera’s books during the Subscription Period. The minimum payroll
deduction allowed is 2% of the Participant’s eligible compensation, and the maximum payroll deduction is
5% of the Participant’s eligible compensation (or such other percentages as the Committee may establish
before an Enrollment Period begins). However, Participants will not be able to purchase more than
$25,000 in market value of Shares (as determined on the applicable Commencement Date) in any
calendar year in which the right to purchase Shares is outstanding. No interest shall be paid or credited
with respect to such payroll deductions.
A Participant will automatically participate in the next Subscription Period commencing immediately after
the final Purchase Date of each Subscription Period in which the Participant participates provided that
such Participant remains an eligible employee on the Enrollment Date of the new Subscription Period and
has not either withdrawn from the SPP or terminated employment. A Participant who may automatically
participate in a subsequent Subscription Period is not required to deliver an additional subscription
agreement form for the subsequent Subscription Period in order to continue participation in the SPP.
2.3
Payroll Deductions
Shares acquired pursuant to the exercise of subscription rights may be paid for only by means of payroll
deductions from the Participant's eligible compensation accumulated during the Subscription Period for
which such subscription right was granted (however, if local law outside the U.S. does not permit payroll
deductions, the Committee may modify the procedure for the payment of the Purchase Price to conform
to such laws). A Participant’s eligible compensation includes salary, commissions, overtime, shift
differentials, certain bonuses paid from QPB or Intel’s Annual Performance Bonus program (the “APB”),
or the equivalent Wind River bonus program, and all or any portion of any item of compensation
considered by the Company to be part of the Participant's regular earnings, but excluding items not
considered by the Company to be part of the Participant’s regular earnings. Under the QPB, Intel pays
eligible employees cash bonuses each January, April July and October based on Intel’s profits and each
eligible employee’s daily pay. Generally, full-time employees, part-time employees and interns are
eligible to participate in the QPB. Under the APB, each regular full-time, regular part-time and
noncommissioned employee earns an annual bonus based on Intel’s net income and the employee’s
business unit's performance. Items excluded from Participant’s regular earnings include, but are not
limited to, relocation bonuses, expense reimbursements, certain bonuses paid in connection with mergers
and acquisitions ("M&A"), author incentives, recruitment and referral bonuses, foreign service premiums,
differentials and allowances, other equity award income (such as income from stock options and RSUs
granted under the 2006 Equity Incentive Plan (the "2006 Plan")), and tuition and other reimbursements.
However, for Wind River employees, a Participant’s eligible compensation includes salary, wages
(including amounts elected to be deferred by such employee, that would otherwise have been paid, under
any cash or deferred arrangement or other deferred compensation program established by Wind River or
a subsidiary), overtime pay, commissions, bonuses (ICP, MBO), and other remuneration paid directly to
such employee, but excluding profit sharing, the cost of employee benefits paid for by Wind River or a
subsidiary, education or tuition reimbursements, imputed income arising under any Wind River or
subsidiary group insurance or benefit program, traveling expenses, business and moving expense
3714744-v9\
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reimbursements, income received in connection with stock options, contributions made by Wind River or
a subsidiary under any employee benefit plan, and similar items of compensation.
Except as otherwise provided in the SPP, the amount to be deducted under the SPP from a Participant's
eligible compensation on each payday during a Subscription Period will be determined by the
Participant's completed subscription agreement form. The subscription agreement form will set forth the
percentage of the Participant's eligible compensation to be deducted on each payday during a
Subscription Period in whole percentages of not less than 2% or more than 5% (or such other
percentages as the Committee may establish before a Commencement Date).
Participants may change their rate of contribution for the next Subscription Period by filing a new
subscription agreement form during the applicable Enrollment Period. If a Participant has not followed
such procedures to change the rate of contribution, the rate of contribution shall continue at the originally
elected rate throughout the Subscription Period and future Subscription Periods. Notwithstanding the
foregoing, to the extent necessary to comply with the limit under Section 423(b)(8) of the Code for a given
calendar year in which the right to purchase shares is outstanding, the Committee may reduce a
Participant’s payroll deductions to 0% percent at any time during a Subscription Period scheduled to end
during such calendar year. Participants may decrease, but may not increase, their rate of contribution in
whole percentages one time only during any Subscription Period by filing a contribution reduction form.
An election to decrease the rate of contribution will be effective as soon as administratively feasible.
2.4
Discontinuance of Participation of Participants
During a Subscription Period, Participants may withdraw from participation in the SPP at any time before
the last 48 hours of such Subscription Period by submitting a completed withdrawal and refund of money
form in the manner specified by the Committee. Participants may also withdraw from participation in the
SPP during an Enrollment Period by submitting a completed withdrawal and refund of money form prior to
the end of such Enrollment Period. Upon withdrawal from participation, the balance in the Participant’s
SPP account will be refunded to him or her without interest, his or her right to participate in the current
Subscription Period will be automatically terminated, and no further payroll deductions for the purchase of
Shares will be made during the Subscription Period. A Participant who voluntarily withdraws from the
SPP is prohibited from resuming participation in the SPP in the same Subscription Period from which he
or she withdrew, but may participate in any subsequent Subscription Period by again satisfying the
requirements of eligibility and enrolling in the SPP by submitting a completed subscription agreement
form. The Committee may change the rules pertaining to the timing of withdrawals, limiting the frequency
with which Participants may withdraw and re-enroll in the SPP, and may impose a waiting period on
Participants who want to re-enroll following withdrawal.
2.5
Termination of Employment of Participants
Upon a Participant's termination of employment with Intel or a Participating Subsidiary for any reason
(including death) prior to a Purchase Date, the Participant's participation in the SPP will terminate
immediately. If a Participant’s termination of employment occurs within a certain period of time specified
by the Committee (not to exceed 30 days) prior to the Purchase Date of the then current Subscription
Period, the aggregate amount of such Participant's payroll deductions accumulated in his or her SPP
account not previously applied toward the purchase of Shares will, as soon as practicable, be returned to
the Participant or, in the case of death, to the Participant’s heirs or estate, without interest.
III.
DELIVERY AND SALE OF THE SHARES
As soon as practicable after each Purchase Date, the Company will arrange the delivery to each
Participant, as appropriate, of a record of the Shares purchased and the balance of any amount of payroll
deductions credited to the Participant’s SPP account not used for the purchase of Shares. However, the
Company may deliver such Shares to a broker or designated agent that holds such Shares in the
3714744-v9\
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Participant’s name for his or her benefit, and may use electronic or automated methods of share transfer.
The Committee may require that Shares be retained with such broker or agent for a designated period of
time and/or may establish other procedures to permit tracking of the sale of such Shares to ensure
compliance with applicable local laws. Subject to any applicable shareholding period required by the
Committee, the Participant may sell the Shares purchased on his or her behalf after such Shares are
delivered to him or her.
Participants may also elect for their Shares to automatically be sold one to two days after the Purchase
Date. Because there is a time difference between when the Shares are purchased and when they can be
sold, there is no guarantee that Participants will receive the full discount or receive more than the
Purchase Price of the Shares.
Participants may not assign their subscription or other rights under the SPP to any other person in any
way (other than by will, the laws of descent and distribution) and any attempted assignment will be void.
IV.
RIGHTS RELATED TO THE SHARES
4.1
Type and the Class of the Securities Being Offered, Including the Security Identification
Code
As of April 2, 2016, Intel was authorized to issue 10,000 million Shares and 50 million shares of preferred
stock, par value $0.001 per share. As of April 22, 2016, there were approximately 4,722 million Shares
outstanding, and there were no shares of preferred stock outstanding.
The Shares are listed on the NASDAQ under the symbol “INTC.” The CUSIP number for the Shares is
458140-10-0.
4.2
Legislation Under Which the Securities Have Been Created
The Shares were created under the DGCL. Except as otherwise expressly required under the laws of a
country, the SPP and all rights thereunder shall be governed by and construed in accordance with the
laws of the State of Delaware, U.S.A.
4.3
Form of Securities, Name and Address of the Entity in Charge of Keeping the Records
In general, stockholders may hold Shares, at their choosing, either registered in their name or street
name form. Shares that are registered in their name are kept by Intel’s transfer agent, Computershare
Investor Services LLC ("Computershare"). The address and telephone number for Computershare are:
Regular delivery:
Computershare, Inc.
P.O. Box 43078
Providence, RI 02940, U.S.A.
Overnight:
Computershare Inc.
250 Royall Street
Canton, MA 02021, U.S.A.
Telephone:
+1 (800) 298-0146 (domestic)
+1 (312) 360-5123(international)
The Company’s designated SPP broker for Intel and Altera employees (starting with the February 2017
purchase) is currently UBS Financial Services, Inc. ("UBS"). The address and telephone number of UBS
are:
UBS Financial Services Inc.
1000 Harbor Boulevard
Weehawken, NJ 07086, U.S.A.
+1 (866) 785-4682 (domestic)
+1 (201) 272-7537 (international)
3714744-v9\
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However, for employees of Altera (for the August 2016 purchase) and Wind River, wholly owned
subsidiaries of Intel, the designated SPP broker is currently E*TRADE Financial Corporate Services, Inc.
("E*TRADE"). The address and telephone number of E*TRADE are:
E*TRADE Financial Corporate Services, Inc.
4005 Windward Plaza Drive
Alpharetta, GA 30005, U.S.A.
+1 (800) 838-0908 (domestic)
+1 (650) 599-0125 (international)
Commissions
There is no charge to Participants for the acquisition or holding of the Shares under the SPP and/or the
Irish Plans. Commissions related to the sale of Shares are described below.
The SEC imposes a fee on the transfer of the Shares. This fee is paid to the SEC at the time of sale and
is required for all equity trades. Upon selling the Shares, the Participant will be charged a fee equal to
$0.0000218 multiplied by the total principal amount of the sale proceeds. The SEC will publish a revised
fee rate 30 days after the SEC’s regular appropriation for fiscal year 2016 is enacted, and this new fee
rate will become effective 60 days after the appropriation is enacted.
In addition, UBS imposes a fee for the sale of Shares equal to $0.03 per Share with a daily cap on fees of
$1,000 per person. UBS also charges a $10 international wire transfer fee. In addition to the SEC fees,
for employees of Wind River, E*TRADE imposes a fee for the sale of Shares equal to $19.95 per trade
and a processing fee for international check requests or for wiring sale proceeds. The fee for the sale of
Shares acquired under the Irish Plans depends on the broker chosen by an Irish Participant.
4.4
Currency of the Securities Issue
The United States Dollar is the currency of the securities issue. Participants assume the risk of any
currency fluctuations at the time of (i) their contribution to the SPP by payroll deductions and (ii) the selling
of their Shares.
4.5
Rights Attached to the Securities
No Participant shall have any voting, dividend, or other stockholder rights with respect to any offering
under the SPP until the Shares have been purchased on behalf of the Participant. Following such
purchase, the Participant shall be entitled to the rights attached to the Shares, as further described below:
Dividend Rights. Dividend rights are provided for in the Bylaws. Under the DGCL and subject to
preferences that may apply to shares of Intel preferred stock outstanding at the time, the holders of
outstanding Shares are entitled to receive dividends either (1) out of the surplus, or (2) in case there shall
be no such surplus, out of the company’s net profits for the fiscal year in which the dividend is declared
and/or the preceding fiscal year as Intel’s Board may from time to time determine (see Section 170 of the
DGCL).
Intel's total dividend payments were $4.6 billion in 2015 compared to $4.4 billion in 2014 and $4.5 billion
in 2013. As of December 26, 2015, Intel has paid a cash dividend in each of the past 93 quarters. In
January 2016, the Board declared a cash dividend of $0.26 per Share for first quarter of 2016. The
dividend was payable on March 1, 2016 to stockholders of record on February 7, 2016. In March 2016,
the Board declared a cash dividend of $0.26 per Share for second quarter of 2016. The dividend was
payable on June 1, 2016 to stockholders of record on May 7, 2016.
Voting Rights. Meetings of Intel’s stockholders shall be held at such place, either within or without the
State of Delaware, as may be designated from time to time by the Board, or, if not so designated, then at
3714744-v9\
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the office of the Company required to be maintained pursuant to Section 2 of Article I of the Bylaws. The
annual meetings of Intel’s stockholders for the purpose of election of directors, and for such other
business as may lawfully come before them, shall be held on such date and at such time as may be
designated from time to time by the Board, but in no event more than fifteen (15) months after the date of
the preceding annual meeting.
Except as otherwise provided by law or the Certificate of Incorporation, written notice (as the term
“written” is defined in Article XII in the Bylaws) of each meeting of stockholders, specifying the place, if
any, date and hour of the meeting; the means of remote communications, if any, by which stockholders
and proxy holders may be deemed to be present in person and vote at such meeting; and the purpose or
purposes of the meeting, shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder entitled to vote thereat, directed to the stockholders in
accordance with the procedures set forth in Article X in the Bylaws. Notice shall be deemed to have been
given to all stockholders of record who share an address if notice is given in accordance with the
“householding” rules set forth in Rule 14a-3(e) under the Securities Exchange Act of 1934, as amended.
At all meetings of stockholders, except where otherwise provided by law, the Certificate of Incorporation
or the Bylaws, the presence, in person or by proxy duly authorized, of the holders of a majority of the
outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business.
Shares, the voting of which at said meeting have been enjoined, or which for any reason cannot be
lawfully voted at such meeting, shall not be counted to determine a quorum at said meeting. In the
absence of a quorum, any meeting of stockholders may be adjourned, from time to time, by vote of the
holders of a majority of the shares represented thereat, but no other business shall be transacted at such
meeting. At such adjourned meeting at which a quorum is present or represented, any business may be
transacted which might have been transacted at the original meeting. The stockholders present at a duly
called or convened meeting, at which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
Except as otherwise provided by law, the Certificate of Incorporation or the Bylaws, all action taken by the
holders of a majority of the voting power represented at any meeting at which a quorum is present shall
be valid and binding upon the corporation.
Except as otherwise provided by law, only persons in whose names shares entitled to vote stand on the
stock records of the corporation on the record date for determining the stockholders entitled to vote at a
meeting shall be entitled to vote at such meeting. Shares standing in the names of two (2) or more
persons shall be voted or represented in accordance with the determination of the majority of such
persons, or, if only one (1) of such persons is present in person or represented by proxy, such person
shall have the right to vote such shares and such shares shall be deemed to be represented for the
purpose of determining a quorum. Every person entitled to vote shall have the right to do so either in
person or by an agent or agents authorized by a written proxy executed by such person or his duly
authorized agent, which proxy shall be filed with the Secretary of the corporation at or before the meeting
at which it is to be used. Said proxy so appointed need not be a stockholder. No proxy shall be voted on
after three (3) years from its date unless the proxy provides for a longer period.
A quorum of the Board shall consist of a majority of the exact number of directors fixed from time to time
in accordance with Section 1 of Article III of the Bylaws, but not less than one (1); provided, however, at
any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn
from time to time until the time fixed for the next regular meeting of the Board, without notice other than
by announcement at the meeting. At each meeting of the Board at which a quorum is present, all
questions and business shall be determined by a vote of a majority of the directors present, unless a
different vote be required by law, the Certificate of Incorporation or the Bylaws.
Except as provided in Section 3 of Article III of the Bylaws, each director shall be elected by the vote of
the majority of the votes cast with respect to the director at any meeting for the election of directors at
which a quorum is present, provided that if as of a date that is fourteen (14) days in advance of the date
the corporation files its definitive proxy statement (regardless of whether or not thereafter revised or
supplemented) with the SEC the number of nominees exceeds the number of directors to be elected, the
3714744-v9\
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directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any
such meeting and entitled to vote on the election of directors. For purposes of this section, a majority of
the votes cast means that the number of shares voted “for” a director must exceed the number of votes
cast against that director.
Pursuant to Section 242 of the DGCL, after a corporation has received payment for any of its capital
stock, it may amend its certificate of incorporation, from time to time, in any and as many respects as may
be desired, so long as its certificate of incorporation as amended would contain only such provisions as it
would be lawful and proper to insert in an original certificate of incorporation filed at the time of the filing of
the amendment; and, if a change in stock or the rights of stockholders, or an exchange, reclassification,
subdivision, combination or cancellation of stock or rights of stockholders is to be made, such provisions
as may be necessary to effect such change, exchange, reclassification, subdivision, combination or
cancellation. In particular, and without limitation upon such general power of amendment, a corporation
may amend its certificate of incorporation, from time to time, so as:
(1) To change its corporate name; or
(2) To change, substitute, enlarge or diminish the nature of its business or its corporate powers and
purposes; or
(3) To increase or decrease its authorized capital stock or to reclassify the same, by changing the
number, par value, designations, preferences, or relative, participating, optional, or other special
rights of the shares, or the qualifications, limitations or restrictions of such rights, or by changing
shares with par value into shares without par value, or shares without par value into shares with par
value either with or without increasing or decreasing the number of shares, or by subdividing or
combining the outstanding shares of any class or series of a class of shares into a greater or lesser
number of outstanding shares; or
(4) To cancel or otherwise affect the right of the holders of the shares of any class to receive dividends
which have accrued but have not been declared; or
(5) To create new classes of stock having rights and preferences either prior and superior or subordinate
and inferior to the stock of any class then authorized, whether issued or unissued; or
(6) To change the period of its duration.
Any or all such changes or alterations may be effected by one certificate of amendment.
The board of directors shall adopt a resolution setting forth the amendment proposed, declaring its
advisability, and either calling a special meeting of the stockholders entitled to vote in respect thereof for
the consideration of such amendment or directing that the amendment proposed be considered at the
next annual meeting of the stockholders. Such special or annual meeting shall be called and held upon
written notice given not less than ten (10) nor more than sixty (60) days before the date of the meeting to
each stockholder entitled to vote at such meeting as of the record date for determining the stockholders
entitled to notice of the meeting. The notice shall set forth such amendment in full or a brief summary of
the changes to be effected thereby, as the directors shall deem advisable. At the meeting a vote of the
stockholders entitled to vote thereon shall be taken for and against the proposed amendment. If a majority
of the outstanding stock entitled to vote thereon, and a majority of the outstanding stock of each class
entitled to vote thereon as a class has been voted in favor of the amendment, a certificate setting forth the
amendment and certifying that such amendment has been duly adopted in accordance with Section 242
of the DGCL shall be executed, acknowledged and filed and shall become effective.
Right to Receive Liquidation Distributions. Upon a liquidation, dissolution or winding-up of Intel, the
assets legally available for distribution to stockholders are distributable ratably among the holders of
Shares outstanding at that time after payment of any liquidation preferences on any outstanding preferred
3714744-v9\
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stock.
No Preemptive, Redemptive or Conversion Provisions. The Shares are not entitled to preemptive
rights and are not subject to conversion or redemption.
4.6
Transferability
The Shares offered under the SPP are registered on a registration statement on Form S-8 with the SEC
and are generally freely transferable. Please refer to Section B. 5.4 of this prospectus with respect to the
Irish Plans.
The SPP is intended to provide Shares for investment and not for resale. The Company does not,
however, intend to restrict or influence any Participant in the conduct of his or her own affairs. A
Participant, therefore, may sell Shares purchased under the SPP at any time he or she chooses, subject
to compliance with any applicable securities laws. THE PARTICIPANT ASSUMES THE RISK OF ANY
MARKET FLUCTUATIONS IN THE PRICE OF THE SHARES.
4.7
General Provisions Applying to Business Combinations
Intel is subject to Section 203 of the DGCL, which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any "business combination" with an "interested stockholder" for a period of
three (3) years following the time that such stockholder became an interested stockholder, unless:
•
the board of directors of the corporation approves either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder, prior to the time
the interested stockholder attained that status;
•
upon the closing of the transaction that resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least eighty-five (85%) of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding (but not the outstanding voting stock owned by the
interested stockholder), those shares owned (i) by persons who are directors and also officers
and (ii) by employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be tendered in a tender or
exchange offer; or
•
at or subsequent to such time, the business combination is approved by the board of directors
and authorized at an annual or special meeting of stockholders, and not by written consent, by
the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the
interested stockholder.
With certain exceptions, an "interested stockholder" under Section 203 of the DGCL is a person or group
who or which owns fifteen percent (15%) or more of the corporation’s outstanding voting stock (including
any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or
upon the exercise of conversion or exchange rights, and stock with respect to which the person has
voting rights only), or is an affiliate or associate of the corporation and was the owner of fifteen percent
(15%) or more of such voting stock at any time within the previous three (3) years.
In general, Section 203 of the DGCL defines a business combination to include:
•
any merger or consolidation involving the corporation or any of its subsidiaries with the interested
stockholder;
•
any sale, transfer, pledge or other disposition of ten percent (10%) or more of the assets of the
corporation involving the interested stockholder;
3714744-v9\
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•
subject to certain exceptions, any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation or any of its subsidiaries to the interested stockholder;
•
any transaction involving the corporation or any of its subsidiaries that has the effect of increasing
the proportionate share of the stock or any class or series of the corporation or of any such
subsidiary beneficially owned by the interested stockholder; or
•
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation or any of its
subsidiaries.
A Delaware corporation, such as Intel, may "opt out" of this provision with an express provision in its
original certificate of incorporation or an express provision in its certificate of incorporation or bylaws
resulting from a stockholders’ amendment approved by at least a majority of the outstanding voting
shares. However, Intel has not "opted out" of this provision. Section 203 could prohibit or delay mergers
or other takeover or change-in-control attempts and, accordingly, may discourage attempts to acquire
Intel.
Section 253 of the DGCL authorizes the board of directors of a Delaware corporation that owns ninety
percent (90%) or more of each of the outstanding classes of stock of a subsidiary that are entitled to vote
on a merger to merge the subsidiary into itself without any requirement for action to be taken by the board
of directors of the subsidiary.
Section 251(h) of the DGCL, subject to certain exceptions, permits parties entering into a merger
agreement to "opt in" to eliminate a target stockholder vote on a back-end merger following a tender or
exchange offer in which the acquirer accumulates sufficient shares to approve the merger agreement (a
majority unless the target has adopted a higher vote requirement) but less than the 90% necessary to
effect a short-form merger.
V.
THE IRISH PLANS
5.1
Purpose of the Irish Plans
The purpose of the Irish Plans is to provide employees of the Company and its participating subsidiaries
in Ireland an opportunity to purchase Shares under a tax-favored arrangement.
5.2
Eligibility
To be eligible to participate, an individual must be an Intel regular full-time or an Intel regular part-time
employee of Intel Ireland from whom Intel deducts pay-as-you-earn (“PAYE”) tax and Pay Related Social
Insurance (“PRSI”), and the benefits apply only in respect of the period of service for which such
deductions are actually made. The individual must be an active employee on the day on which the
Shares are purchased.
5.3
Participation in the Irish Plans
The Irish Plans are offered to employees four times each year. The Intel Ireland Profit Sharing Scheme is
offered to eligible employees of Intel Ireland Limited, and Intel Shannon Profit Sharing Scheme is offered
to eligible employees of Intel Research and Development Ireland Ltd. In July and October 2016 and April
2017 employees may make contributions from the QPB towards the purchase of Shares. In January
2017, employees may make contributions from the APB and QPB towards the purchase of Shares.
Under the QPB, Intel pays eligible employees cash bonuses each January, April, July and October based
on Intel’s profits and the total cost of a day’s pay for all eligible employees worldwide. Generally, full-time
employees, part-time employees and interns are eligible to participate in the QPB.
3714744-v9\
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Eligible employees are offered participation in the Irish Plans and may decide to enroll by completing the
enrollment process by the deadline prior to each offering period as determined by the Company. To
participate in the Irish Plans, eligible employees must complete the Annual Performance Bonus (APB)
Election Form on the Company’s intranet. Eligible employees may elect to allocate all or part of the
Bonus in whole percentages, subject to the applicable limitations set forth in the Annual Performance
Bonus (APB) Election Form, to acquire Shares. Eligible Employees may cancel their investment in the
Irish Plans by electing 0% of the Bonus and any funds remaining in their Irish Plan account will be paid to
them in cash without interest.
The maximum amount of annual contributions an employee may make to the Irish Plans is €12,700 from
bonuses. An employee can invest an APB target of 1.01% of Base pay multiplied by the multiplier, into
the Irish Plans.
If an employee chooses not to participate, he or she is not required to invest his or her bonuses towards
the purchase of Shares in the Irish Plans.
The purchase price will be the market price per Share on the NASDAQ on the date the Shares are
purchased.
5.4
Trustee and Delivery of Shares
The trust is administered by a trustee, Mercer Ltd. at Share Schemes Department – CHG-8, Charlotte
House, Charlemont Street, Dublin 2, Ireland, or such other trustee as the Company may appoint. The
trustee will acquire the Shares on the open market on the NASDAQ and hold them on the Irish
Participant’s behalf. The trustee will provide details of the Shares purchased to each Irish Participant.
The trustee is also the recordkeeper and administrator of the Irish Plans.
Shares will remain in the trustee’s name for the period of retention (as defined in the Irish Plans). During
this period of retention (which is normally two years from the date of the allocation), the Irish Participant
may not sell, gift or pledge the Shares unless (i) the Irish Participant ceases to be an employee due to
injury, disability or redundancy or (ii) the Irish Participant reaches the age of 66.
After two years, the Irish Participant may instruct the trustee to sell or transfer the Shares. However, if the
Irish Participant instructs the trustee to sell or transfer Shares within three years from the date of
allocation, the Irish Participant will be liable for income tax on the purchase price of the Shares and the
income tax due will be offset against the tax liability at sale. Accordingly, the trustee will generally hold
the Shares for three years from the date of allocation, unless instructed otherwise. Provided the Shares
are not sold before the three years following the date of allocation, no income tax will be due on the value
of the Shares and capital gains tax (“CGT”) will be due at sale. Please also refer to Section B. 13.6 of this
prospectus.
During the time the Shares are held by the trustee, the Irish Participant can give written instructions to the
trustee with regard to the exercise of the rights attached to the Shares.
VI.
STATEMENT OF CAPITALIZATION AND INDEBTEDNESS AS OF APRIL 2, 2016
6.1
Capitalization and Indebtedness (Dollars in millions – unaudited)
Total Current debt
- Guaranteed
- Secured
- Unguaranteed / Unsecured
$
$
3,594
3,594
Total Non-Current debt (excluding current portion of long-term debt)
$
21,775
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- Guaranteed
- Secured
- Unguaranteed / Unsecured
$
a. Share Capital and Additional Paid-in Capital
b. Legal Reserve
c. Total Other Reserves
- Accumulated other comprehensive income
- Retained earnings
Total stockholders’ equity
6.2
$
$
$
$
$
21,775
24,088
37,086
560
36,526
61,174
Net Indebtedness (Dollars in millions – unaudited)
A.
B.
C.
D.
Short-term investments
Trading assets
Liquidity (A) + (B) + (C)
$
$
$
$
3,061
2,927
9,103
15,091
E.
Current Financial Receivable
$
268
F.
G.
H.
I.
Current Bank debt
Current portion of non-current debt
Other current financial debt
Current Financial Debt (F) + (G) + (H)
$
$
$
2,606
988
3,594
J.
Net Current Financial Indebtedness (I) – (E) – (D)
$
(11,765)
K.
L.
M.
Non-current Bank loans
Bonds Issued
Other non-current loans
$
21,775
-
N.
Non-current Financial Indebtedness (K) + (L) + (M)
$
21,775
O.
Net Financial Indebtedness (J) + (N)
$
10,010
On May 19, 2016, subsequent to the end of the first quarter of 2016, Intel issued $500 million aggregate
principal amount of 1.700% Senior Notes due 2021 (the “2021 Notes”), $1.00 billion aggregate principal
amount of 2.600% Senior Notes due 2026 (the “2026 Notes”) and $1.25 billion aggregate principal
amount of 4.100% Senior Notes due 2046 (the “2046 Notes” and, together with the 2021 Notes and the
2026 Notes, the “Notes”). The aggregate principal amount of the Notes is $2.75 billion, and the net
proceeds from the offering are approximately $2.74 billion, before expenses and before deducting
underwriting discounts.
6.3
Indirect and Contingent Indebtedness
The information contained in this Section 6.3 is excerpted from (i) “Note 17: Commitments” of Intel’s Form
10-K; and (ii) “Note 21. Contingencies” of Intel’s Form 10-Q.
Commitments
A portion of our capital equipment and certain facilities are under operating leases that expire at various
dates through 2030. Additionally, portions of our real property are under leases that expire at various
3714744-v9\
43
dates through 2062. Rental expense was $253 million in 2015 ($257 million in 2014 and $270 million in
2013).
Minimum rental commitments under all non-cancelable leases with an initial term in excess of one year
were as follows as of December 26, 2015:
(In Millions)
2016
2017
2018
2019
2020
2021 and thereafter
$
234
209
167
144
120
326
Total
$
1,200
Commitments for construction or purchase of property, plant and equipment totaled $5.7 billion as of
December 26, 2015 ($3.5 billion as of December 27, 2014), a majority of which will be due within the next
12 months. Other purchase obligations and commitments totaled approximately $4.0 billion as of
December 26, 2015 (approximately $2.5 billion as of December 27, 2014). Other purchase obligations
and commitments include payments due under various types of licenses and agreements to purchase
goods or services, as well as payments due under non-contingent funding obligations. Funding
obligations include agreements to fund various projects with other companies. In addition, we have
various contractual commitments with Micron Technology, Inc. and IMFT. For further information on these
contractual commitments, see "Note 5: Cash and Investments" in Intel's Form 10-K.
During 2012, we entered into a series of agreements with ASML intended to accelerate the development
of extreme ultraviolet lithography projects and deep ultraviolet immersion lithography projects, including
generic developments applicable to both 300mm and 450mm. Certain of these agreements were
amended in 2014. Under the amended agreements, Intel agreed to provide R&D funding totaling €829
million over five years and committed to advance purchase orders for a specified number of tools from
ASML. Our remaining obligation, contingent upon ASML achieving certain milestones, is approximately
€367 million, or $403 million, as of December 26, 2015. As our obligation is contingent upon ASML
achieving certain milestones, we have excluded this obligation from other purchase obligations and
commitments.
Legal Proceedings
We are a party to various legal proceedings, including those noted in this section. Although management
at present believes that the ultimate outcome of these proceedings, individually and in the aggregate, will
not materially harm our financial position, results of operations, cash flows, or overall trends, legal
proceedings and related government investigations are subject to inherent uncertainties, and unfavorable
rulings or other events could occur. Unfavorable resolutions could include substantial monetary damages.
In addition, in matters for which injunctive relief or other conduct remedies are sought, unfavorable
resolutions could include an injunction or other order prohibiting us from selling one or more products at
all or in particular ways, precluding particular business practices, or requiring other remedies. An
unfavorable outcome may result in a material adverse impact on our business, results of operations,
financial position, and overall trends. We might also conclude that settling one or more such matters is in
the best interests of our stockholders, employees and customers, and any such settlement could include
substantial payments. Except as specifically described below, we have not concluded that settlement of
any of the legal proceedings noted in this section is appropriate at this time.
3714744-v9\
44
Government Competition Matters and Consumer Class Actions
A number of proceedings generally have challenged and continue to challenge certain of our competitive
practices. The allegations in these proceedings vary and are described in more detail in the following
paragraphs. In general, they contend that we improperly conditioned price rebates and other discounts on
our microprocessors on exclusive or near-exclusive dealing by some of our customers; and they allege
®
that our software compiler business unfairly preferred Intel microprocessors over competing
microprocessors and that, through the use of our compilers and other means, we have caused the
dissemination of inaccurate and misleading benchmark results concerning our microprocessors. Based
on the procedural posture of the various remaining competition matters, which we describe in the
following paragraphs, our investment of resources to explain and defend our position has declined as
compared to the period 2005-2011. Nonetheless, certain of the matters remain active, and these
challenges could continue for a number of years, potentially requiring us to invest additional resources.
We believe that we compete lawfully and that our marketing, business, intellectual property, and other
challenged practices benefit our customers and our stockholders, and we will continue to conduct a
vigorous defense in the remaining proceedings.
In 2001, the European Commission ("EC") commenced an investigation regarding claims by Advanced
Micro Devices, Inc. ("AMD") that we used unfair business practices to persuade customers to buy our
microprocessors. We received numerous requests for information and documents from the EC and we
responded to each of those requests. The EC issued a Statement of Objections in July 2007 and held a
hearing on that Statement in March 2008. The EC issued a Supplemental Statement of Objections in July
2008. In May 2009, the EC issued a decision finding that we had violated Article 82 of the EC Treaty and
Article 54 of the European Economic Area Agreement. In general, the EC found that we violated Article
82 (later renumbered as Article 102 by a new treaty) by offering alleged "conditional rebates and
payments" that required our customers to purchase all or most of their x86 microprocessors from us. The
EC also found that we violated Article 82 by making alleged "payments to prevent sales of specific rival
products." The EC imposed a fine in the amount of €1.1 billion ($1.4 billion as of May 2009), which we
subsequently paid during the third quarter of 2009, and ordered us to "immediately bring to an end the
infringement referred to in" the EC decision.
The EC decision contained no specific direction on whether or how we should modify our business
practices. Instead, the decision stated that we should "cease and desist" from further conduct that, in the
EC's opinion, would violate applicable law. We took steps, which are subject to the EC's ongoing review,
to comply with that decision pending appeal. We had discussions with the EC to better understand the
decision and to explain changes to our business practices.
We appealed the EC decision to the Court of First Instance (which has been renamed the General Court)
in July 2009. The hearing of our appeal took place in July 2012. In June 2014, the General Court rejected
our appeal in its entirety. In August 2014, we filed an appeal with the European Court of Justice. In
November 2014, Intervener Association for Competitive Technologies filed comments in support of Intel’s
grounds of appeal. The EC and interveners filed briefs in November 2014, we filed a reply in February
2015, and the EC filed a rejoinder in April 2015. The Court of Justice has scheduled oral argument for
June 2016.
At least 82 separate class-action lawsuits were filed in the U.S. District Courts for the Northern District of
California, Southern District of California, District of Idaho, District of Nebraska, District of New Mexico,
District of Maine, and District of Delaware, as well as in various California, Kansas, and Tennessee state
courts. These actions generally repeat the allegations made in a now-settled lawsuit filed against us by
AMD in June 2005 in the U.S. District Court for the District of Delaware (AMD litigation). Like the AMD
litigation, these class-action lawsuits allege that we engaged in various actions in violation of the
Sherman Act and other laws by, among other things: providing discounts and rebates to our manufacturer
and distributor customers conditioned on exclusive or near-exclusive dealing that allegedly unfairly
interfered with AMD's ability to sell its microprocessors; interfering with certain AMD product launches;
and interfering with AMD's participation in certain industry standards-setting groups. The class actions
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allege various consumer injuries, including that consumers in various states have been injured by paying
higher prices for computers containing our microprocessors.
All of the federal and state class actions other than the California class actions were transferred by the
Multidistrict Litigation Panel to the U.S. District Court in Delaware for all pre-trial proceedings and
discovery (MDL proceedings). The Delaware district court appointed a Special Master to address issues
in the MDL proceedings, as assigned by the court. In July 2010, the Special Master denied the MDL
plaintiffs' motion to certify a class of members who purchased certain personal computers containing
products sold by us. In July 2014, the district court affirmed the Special Master's ruling and issued an
order denying the MDL plaintiffs' motion for class certification. In August 2014, plaintiffs filed a petition for
interlocutory appeal of the district court's decision with the U.S. Court of Appeals for the Third Circuit,
which the Third Circuit denied in October 2014. In December 2014, we filed a motion for summary
judgment on the claims of the remaining individual plaintiffs. We subsequently negotiated a settlement of
the claims and the case was dismissed in September 2015.
All California class actions were consolidated in the Superior Court of California in Santa Clara County. In
March 2008, the plaintiffs in the California actions moved for class certification, which we opposed. In
February 2015, the court granted plaintiffs' request for leave to retain a new expert and to amend their
previous motion for class certification. In March 2016, the court denied plaintiffs’ amended class
certification motion, and plaintiffs filed a motion for reconsideration, which is scheduled for hearing in
June 2016. Given the procedural posture and the nature of these cases, we are unable to make a
reasonable estimate of the potential loss or range of losses, if any, arising from these matters.
Shareholder Derivative Litigation regarding In re High Tech Employee Antitrust Litigation
In March 2014, the Police Retirement System of St. Louis ("PRSSL") filed a shareholder derivative action
in the Superior Court of California in Santa Clara County against Intel, certain current and former
members of our Board, and a current officer. The complaint alleges that the defendants breached their
duties to the company by participating in, or allowing, purported antitrust violations, which were alleged in
a now-settled antitrust class action lawsuit captioned In re High Tech Employee Antitrust Litigation
claiming that Intel, Adobe Systems Incorporated, Apple Inc., Google Inc., Intuit Inc., Lucasfilm Ltd., and
Pixar conspired to suppress their employees’ compensation. In March 2014, a second plaintiff, Barbara
Templeton, filed a substantially similar derivative suit in the same court. In May 2014, a third shareholder,
Robert Achermann, filed a substantially similar derivative action in the same court. The court consolidated
the three actions into one, which is captioned In re Intel Corporation Shareholder Derivative Litigation.
Plaintiffs filed a consolidated complaint in July 2014. In August 2015, the court granted our motion to
dismiss the consolidated complaint. The plaintiffs thereafter filed a motion for reconsideration and a
motion for new trial, both of which the court denied in October 2015. In November 2015, plaintiffs PRSSL
and Templeton appealed the court's decision.
In June 2015, the International Brotherhood of Electrical Workers ("IBEW") filed a shareholder derivative
action in the Chancery Court in Delaware against Intel, certain current and former members of our Board,
and a current officer. The lawsuit makes allegations that are substantially similar to those in the California
shareholder derivative litigation described above, but contain additional allegations regarding breach of
the duty of disclosure surrounding the In re High Tech Employee Antitrust Litigation and that the Intel
2013 and 2014 proxy statements were false and misleading in that they misrepresented the effectiveness
of the Board’s oversight of compliance issues at Intel and the Board’s compliance with Intel’s Code of
Conduct and Board of Director Guidelines on Significant Corporate Governance Issues. In October 2015,
the court stayed the IBEW lawsuit for six months pending further developments in the California case. In
March 2016, Intel and IBEW entered into a stipulated dismissal pursuant to which IBEW dismissed its
complaint but may re-file upon the withdrawal or final resolution of the appeal in the California
shareholder derivative litigation.
In April 2016, John Esposito filed a shareholder derivative action in the Superior Court of California in
Santa Clara County against Intel, current members of our Board, and certain former officers and
employees. Esposito made a demand on our Board in 2013 to investigate whether our officers or
3714744-v9\
46
directors should be sued for their participation in the events described in In re High Tech Employee
Antitrust Litigation. In November 2015, our Board decided not to take further action on Esposito’s demand
based on the recommendation of the Audit Committee of the Board after its investigation of relevant facts
and circumstances. Esposito seeks to set aside such decision, and alleges that the Board was not
disinterested in making that decision and that the investigation was inadequate.
McAfee, Inc. Shareholder Litigation
On August 19, 2010, we announced that we had agreed to acquire all of the common stock of McAfee,
Inc. ("McAfee") for $48.00 per share. Four McAfee shareholders filed putative class-action lawsuits in
Santa Clara County, California Superior Court challenging the proposed transaction. The cases were
ordered consolidated in September 2010. Plaintiffs filed an amended complaint that named former
McAfee board members, McAfee and Intel as defendants, and alleged that the McAfee board members
breached their fiduciary duties and that McAfee and Intel aided and abetted those breaches of duty. The
complaint requested rescission of the merger agreement, such other equitable relief as the court may
deem proper, and an award of damages in an unspecified amount. In June 2012, the plaintiffs’ damages
expert asserted that the value of a McAfee share for the purposes of assessing damages should be
$62.08.
In January 2012, the court certified the action as a class action, appointed the Central Pension Laborers’
Fund to act as the class representative, and scheduled trial to begin in January 2013. In March 2012,
defendants filed a petition with the California Court of Appeal for a writ of mandate to reverse the class
certification order; the petition was denied in June 2012. In March 2012, at defendants’ request, the court
held that plaintiffs were not entitled to a jury trial, and ordered a bench trial. In April 2012, plaintiffs filed a
petition with the California Court of Appeal for a writ of mandate to reverse that order, which the court of
appeal denied in July 2012. In August 2012, defendants filed a motion for summary judgment. The trial
court granted that motion in November 2012, and entered final judgment in the case in February 2013. In
April 2013, plaintiffs appealed the final judgment. Intel, McAfee, and McAfee’s board of directors filed an
opposition to plaintiff’s appeal in December 2014. Because the resolution of the appeal may materially
impact the scope and nature of the proceeding, we are unable to make a reasonable estimate of the
potential loss or range of losses, if any, arising from this matter. We dispute the class-action claims and
intend to continue to defend the lawsuit vigorously.
VII.
MAXIMUM DILUTION AND NET PROCEEDS
7.1
Maximum Dilution
The Shares under the SPP are offered pursuant to this prospectus to approximately 16,390 eligible
employees (as of March 2016) in Austria, Denmark, Finland, France, Germany, Ireland, the Netherlands,
Poland, Romania, Sweden and the United Kingdom. As indicated in Section 1.2 above, the maximum
rate at which employees may purchase newly-issued Shares under the SPP may not exceed $25,000
worth of Shares (based on the market value of Shares as determined on the Commencement Date of
each Subscription Period) per calendar year in which the right is outstanding at any time. However, as
noted above, there are other limitations on Share purchases (such as Participants may not purchase
more than 72,000 Shares per Subscription Period and no more than 5% of eligible compensation may be
contributed for SPP purchases) which may result in employees not being able to purchase $25,000 worth
of Shares in a calendar year.
Intel’s Subscription Periods consist of the six-month periods commencing on each February 20 and
August 20. Assuming that the Participants did not participate in the prior Subscription Period, the SPP
limitations in addition to the $25,000 limitation described above are not exceeded and eligible employees
enroll in the Subscription Period beginning on August 20, 2016, each Participant would be able to
purchase a maximum of 793 whole Shares in February 2017 for a maximum of $21,226.23 in
contributions per person. These amounts are calculated based on a hypothetical market value of $31.49
on May 26, 2016, which would result in a hypothetical Purchase Price of $26.767 (85% of $31.49) for the
3714744-v9\
47
Subscription Periods which begin on August 20, 2016 and February 20, 2017. Participants would also be
able to purchase additional Shares during the next Subscription Period (i.e., February 20, 2017 – August
19, 2017). Assuming that the Participants participate in the next Subscription Period and the SPP
limitations in addition to the $25,000 limitation described above are not exceeded, each Participant would
again be able to purchase a maximum of 793 whole Shares in August 2017, for a maximum of
$21,226.23 in contributions per person. Assuming that all of the Participants would each purchase 1,586
Shares in the Subscription Periods beginning August 20, 2016 and February 20, 2017, the maximum
number of newly issued Shares offered pursuant to this prospectus amounts to 25,994,540 Shares.
Based on the above assumptions, the holdings of a stockholder of Intel currently holding one percent
(1%) of the total outstanding Share capital of Intel as of April 22, 2016, that is 47,220,000 Shares, and
who would not participate in the offering, would be diluted as indicated in the following dilution table:
Percentage of the total
outstanding Shares
Total number of outstanding
Shares
Before the offering (as of April
22, 2016)
1.00%
4,722,000,000
After issuance of 25,994,540
Shares under the SPP
0.9945%
4,747,994,540
7.2
Net Proceeds
Assuming the 16,390 eligible employees in Austria, Denmark, Finland, France, Germany, Ireland, the
Netherlands, Poland, Romania, Sweden and the United Kingdom would purchase the maximum amount
of Shares under the SPP offered pursuant to this prospectus, that is, a total of $42,452.46 each, then the
gross proceeds to Intel in connection with the offer under the SPP pursuant to this prospectus would be
$695,795,819.40. After deducting legal and accounting expenses in connection with the offer, the net
proceeds, based on the above assumptions, would be approximately $695,695,819.40
VIII.
DIRECTORS AND EXECUTIVE OFFICERS
8.1
Board of Directors as of May 19, 2016*
*
Age
Intel Board
Member Since
Director
65
2004
Aneel Bhusri
Director
50
2014
Andy D. Bryant
Director, Chairman of the Board
65
2011
John J. Donahoe
Lead Director of the Board
55
2009
Reed E. Hundt
Director
68
2001
Brian M. Krzanich
Director, Chief Executive Officer
55
2013
James D. Plummer
Director
71
2005
David S. Pottruck
Director
67
1998
Frank D. Yeary
Director
52
2009
David B. Yoffie
Director
61
1989
Name
Position with the Company
Charlene Barshefsky
Bios and ages of the directors are as of April 4, 2016.
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48
Ambassador
Charlene
Barshefsky
OTHER CURRENT
PUBLIC BOARDS:
American Express
Company, Estée
Lauder Companies,
and Starwood Hotels &
Resorts Worldwide
Aneel Bhusri
OTHER CURRENT
PUBLIC BOARDS:
Workday, Inc.
Ambassador Charlene Barshefsky has been a Senior International Partner at Wilmer
Cutler Pickering Hale and Dorr LLP ("WilmerHale"), a multinational law firm in
Washington, D.C., since 2001. Prior to joining the law firm, Ambassador Barshefsky
served as the United States Trade Representative, the chief trade negotiator and
principal trade policy maker for the United States and a member of the President’s
Cabinet from 1997 to 2001, and as Acting and Deputy United States Trade
Representative from 1993 to 1996. Ambassador Barshefsky is also a director of
American Express Company, Estée Lauder Companies, and Starwood Hotels &
Resorts Worldwide.
Ambassador Barshefsky brings to the Board international experience acquired
prior to, during, and after her tenure as United States Trade Representative. As the
chief trade negotiator for the United States, Ambassador Barshefsky headed an
executive branch agency that operated worldwide in matters affecting international trade
and commerce. Ambassador Barshefsky’s position as Senior International Partner at a
multinational law firm brings to the Board continuing experience in dealing with foreign
governments, focusing on market access and the regulation of business and
investment. Through her government and private experience, Ambassador Barshefsky
provides substantial expertise in doing business in China, where Intel has significant
operations. As a director for other multinational companies, Ambassador Barshefsky
also provides cross-board experience.
Aneel Bhusri has been Chief Executive Officer ("CEO") at Workday, Inc. ("Workday"), a
provider of enterprise cloud applications for human resources and finance
headquartered in Pleasanton, California, since May 2014. Mr. Bhusri has served as a
director of Workday from 2005 to the present, as President from January 2007 to
September 2009, as Co-CEO from September 2009 to May 2014, and as Chairman
from January 2012 to May 2014. He has also been a partner at Greylock Partners, a
venture capital firm, from 1999 to 2015, and currently serves as an advisory partner.
Before co-founding Workday in 2005, Mr. Bhusri held a number of leadership positions
at PeopleSoft, including Senior Vice President responsible for product strategy,
business development, and marketing, and vice chairman of the board. Mr. Bhusri
received an MBA from Stanford University and holds bachelor’s degrees in electrical
engineering and economics from Brown University. He is a Crown Fellow at the Aspen
Institute.
Mr. Bhusri brings to the Board senior leadership, cloud computing expertise, and
operational experience from his experience as CEO and chairman of an enterprise
cloud applications company, his prior work in product, marketing, and business
development of another human resources application company, and his role as partner
of several venture capital firms. Mr. Bhusri’s more than 20 years of experience in
enterprise software innovation and cloud computing brings depth to the Board in areas
that are important to Intel’s business and in today’s connected world.
Andy D. Bryant
OTHER CURRENT
PUBLIC BOARDS:
Columbia Sportswear
and McKesson
Corporation
Andy D. Bryant has been Chairman of the Board since May 2012. Mr. Bryant served as
Vice Chairman of the Board from July 2011 to May 2012. Mr. Bryant joined Intel in
1981, became CFO in February 1994, and was promoted to Senior Vice President in
January 1999. In December 1999, he was promoted to Executive Vice President and
his role expanded to Chief Financial and Enterprise Services Officer. In October 2007,
Mr. Bryant was named Chief Administrative Officer ("CAO"), a position he held until
January 2012. In 2009, Mr. Bryant’s responsibilities expanded to include the
Technology and Manufacturing Group. Mr. Bryant serves on the board of directors of
Columbia Sportswear and McKesson Corporation.
Mr. Bryant brings senior leadership, financial, strategic, and global expertise to
the Board from his former service as CFO and CAO of Intel. Mr. Bryant has budgeting,
accounting controls, and forecasting experience and expertise from his work in Intel
Finance, as CFO and as CAO. Mr. Bryant has been responsible for manufacturing,
human resources, information technology, and finance. Mr. Bryant has regularly
attended Intel Board meetings for more than 18 years in his capacity as CFO and CAO,
and has direct experience as a board member through his service on other public
company boards. After evaluating the Board’s corporate governance guideline
3714744-v9\
49
regarding retirement of corporate officers, the Board determined to re-nominate
Mr. Bryant because it believes that Mr. Bryant continues to be best positioned to
support the independent directors through his service as a key member and Chairman
of the Board with strong leadership skills and financial experience. The Board believes
that Mr. Bryant’s contributions since becoming Chairman in 2012 and his expertise and
experience are invaluable to the Board in the current climate. The Board, therefore,
decided to nominate Mr. Bryant for an additional term as a director and Chairman of the
Board.
John J. Donahoe
OTHER CURRENT
PUBLIC BOARDS:
Nike, Inc. and PayPal
Holdings, Inc.
John J. Donahoe has been Chairman of the Board of PayPal Holdings, Inc., a
technology platform company in San Jose, California, since July 2015. Mr. Donahoe
served as President, CEO, and director of eBay, a global online marketplace in San
Jose, California, from March 2008 to July 2015. Mr. Donahoe joined eBay in 2005 as
President of eBay Marketplaces, and was responsible for eBay’s global e-commerce
businesses. In this role, he focused on expanding eBay’s core business, which
accounts for a large percentage of the company’s revenue. Prior to joining eBay,
Mr. Donahoe was the Worldwide Managing Director from 2000 to 2005 for Bain &
Company, a global management consulting firm based in Boston, Massachusetts,
where he oversaw Bain’s 30 offices and 3,000 employees. Mr. Donahoe also is a
member of Nike, Inc.’s board of directors.
Mr. Donahoe brings senior leadership, strategic, and global expertise to the
Board from his current position as chairman of the board of a major technology
company, his prior work as a President and CEO of a major internet company, and as a
management consultant and leader of a global business consulting firm. In his previous
role at eBay, Mr. Donahoe oversaw a number of strategic acquisitions, bringing
business development and mergers and acquisitions (M&A) experience to the Board.
Mr. Donahoe also provides technical and brand marketing expertise from his role as a
leader of global e-commerce businesses.
Reed E. Hundt
Reed E. Hundt has been a Principal of REH Advisors, LLC, a strategic advice firm in
Washington, D.C., since 2009, and CEO of the Coalition for Green Capital, a non-profit
organization based in Washington, D.C., that designs, develops, and implements green
banks at the state, federal, and international level, since 2010. From 1998 to 2009,
Mr. Hundt was an independent advisor to McKinsey & Company, Inc., a worldwide
management consulting firm in Washington, D.C., and Principal of Charles Ross
Partners, LLC, a private investor and advisory service in Washington, D.C. Mr. Hundt
served as Chairman of the U.S. Federal Communications Commission (FCC) from 1993
to 1997. From 1982 to 1993, Mr. Hundt was a partner with Latham & Watkins, an
international law firm. Mr. Hundt currently provides advisory services to Covington &
Burling LLP, an international law firm. Within the past five years, Mr. Hundt has served
as a member of the board of directors of Infinera Corporation.
As an advisor to and an investor in telecommunications companies and other
businesses on a worldwide basis, Mr. Hundt has significant global experience in
communications technology and the communications business. Mr. Hundt also has
significant government experience from his service as Chairman of the FCC, where he
helped negotiate the World Trade Organization Telecommunications Agreement, which
opened markets in 69 countries to competition and reduced barriers to international
investment. Mr. Hundt’s legal experience enables him to provide perspective and
oversight on legal and compliance matters, and his board service with numerous other
companies, including on their audit committees, provides cross-board experience and
financial expertise. His work with a number of ventures involved in sustainable energy
and the environment provides him with a unique perspective in overseeing Intel’s
environmental and sustainability initiatives.
Brian M. Krzanich
OTHER CURRENT
PUBLIC BOARDS:
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Brian M. Krzanich has been a director and CEO of Intel since May 2013. Mr. Krzanich
joined Intel in 1982. He became a Corporate Vice President in May 2006, serving until
2010 as Vice President and General Manager of Assembly and Test. He was Senior
Vice President and General Manager of Manufacturing and Supply Chain from 2010 to
2012. He was appointed Executive Vice President and Chief Operating Officer in 2012,
50
Deere & Company
responsible for Intel’s global manufacturing, supply chain, human resources, and
information technology operations. Mr. Krzanich is a member of Deere & Company’s
board of directors, and chairman of the board of directors of the Semiconductor Industry
Association.
As our CEO and a senior executive officer with over 31 years of service with Intel,
Mr. Krzanich brings to the Board significant senior leadership, manufacturing and
operations, industry, technical, and global experience, as well as a unique perspective
of the company. As CEO, Mr. Krzanich is directly responsible for Intel’s strategy and
operations.
James D. Plummer
OTHER CURRENT
PUBLIC BOARDS:
Cadence Design
Systems, Inc.
James D. Plummer has been a Professor of Electrical Engineering at Stanford
University in Stanford, California, since 1978, and was Dean of Stanford’s School of
Engineering from 1999 to 2014. Dr. Plummer received his PhD in Electrical Engineering
from Stanford University. Dr. Plummer has published more than 400 papers on silicon
devices and technology, has won numerous awards for his research, and is a member
of the U.S. National Academy of Engineering. Dr. Plummer also directed the Stanford
Nanofabrication Facility from 1994 to 2000. Dr. Plummer is a member of the board of
directors of Cadence Design Systems, Inc. ("Cadence"). Within the past five years,
Dr. Plummer has served as a member of the board of directors of International Rectifier
Corporation.
As a scholar and educator in the field of integrated circuits, Dr. Plummer brings to
the Board industry and technical experience directly related to Intel’s semiconductor
research and development, and manufacturing. Dr. Plummer’s board service with other
public companies, including on their audit committees, provides cross-board experience
and financial expertise.
David S. Pottruck
David S. Pottruck has been Chairman and CEO of Red Eagle Ventures, Inc., a private
equity firm in San Francisco, California, since 2005. Mr. Pottruck has also served as CoChairman of Hightower Advisors, a wealth-management company in Chicago, Illinois,
since 2009 and in 2013 became Chairman. Mr. Pottruck teaches in the MBA and
Executive Education programs of the Wharton School of Business of the University of
Pennsylvania, and serves as a Senior Fellow in the Wharton School of Business Center
for Leadership and Change Management. Prior to joining Red Eagle Ventures, Inc.,
Mr. Pottruck had a 20-year career at Charles Schwab Corporation that included service
as President, CEO, and a member of the board.
As the Chairman and CEO of a private equity firm, and as a former CEO of a major
brokerage firm with substantial Internet operations, Mr. Pottruck brings to the Board
significant senior leadership, management, operational, financial, business
development, and brand management expertise.
Frank D. Yeary
OTHER CURRENT
PUBLIC BOARDS:
PayPal Holdings, Inc.
Frank D. Yeary has been Executive Chairman of CamberView Partners, LLC, an
advisory firm in San Francisco, California that provides proactive corporate governance
and stockholder engagement advice, since 2012. Mr. Yeary was Vice Chancellor of the
University of California, Berkeley from 2008 to 2012, where he led and implemented
major strategic and financial changes to the university’s financial and operating strategy.
Prior to 2008, Mr. Yeary spent nearly 25 years in the finance industry, most recently as
Managing Director, Global Head of Mergers and Acquisitions, and a member of the
Management Committee at Citigroup Investment Banking, a financial services company.
Mr. Yeary was also Chairman and co-founder of Level Money, Inc., a personal finance
organization for young adults, from 2012 to 2015. Within the past five years, Mr. Yeary
has served as a member of the board of directors of eBay. Mr. Yeary is a member of the
board of directors of PayPal.
Mr. Yeary’s extensive career in investment banking and finance brings to the Board
financial strategy and M&A expertise, including expertise in financial reporting and
experience in assessing the efficacy of mergers and acquisitions. In addition,
Mr. Yeary’s role as Vice Chancellor and as Chief Administrative Officer of a large public
research university provides strategic and financial expertise. Mr. Yeary also provides
the Board with insight into best practices in corporate governance and stockholder
engagement.
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David B. Yoffie
Other Current
Public Boards:
Financial Engines,
Inc. and TiVo, Inc.
David B. Yoffie has been a Professor at Harvard University’s Graduate School of
Business Administration in Boston, Massachusetts, since 1981. Dr. Yoffie also served
as the Harvard Business School’s Senior Associate Dean and Chair of Executive
Education from 2006 to 2012. He received a PhD from Stanford University, where he
has been a Visiting Scholar. Dr. Yoffie served as Chairman of the Harvard Business
School Strategy department from 1997 to 2002, as Chairman of the Advanced
Management Program from 1999 to 2002, and as Chair of Harvard’s Young Presidents’
Organization program from 2004 to 2012. Dr. Yoffie is a member of the board of
directors of Financial Engines, Inc. and TiVo, Inc.
As a scholar and educator in the field of international business administration,
Dr. Yoffie brings to the Board significant global experience and knowledge of
competitive strategy, technology, and international competition. Dr. Yoffie’s board
service with other U.S. and non-U.S. public companies also provides cross-board
experience. As our longest-serving director, Dr. Yoffie provides unique insights and
perspectives on Intel’s development and strategic direction.
8.2
*
Executive Officers as of June 1, 2016*
Bios of the executive officers are as February 12, 2016 and ages are as of December 26, 2015. On February 12, 2016, William
Holt, Executive Vice President and General Manager of the Technology and Manufacturing Group of Intel, notified Intel of his
intention to retire effective June 2016. The exact date of Mr. Holt's retirement is to be determined.
Andy D. Bryant, age 65
• 2012 – present
Chairman of the Board
• 2011 – 2012
Vice Chairman of the Board, Executive Vice President, Technology,
Manufacturing and Enterprise Services; Chief Administrative Officer
• 2009 – 2011
Executive Vice President, Technology, Manufacturing, and Enterprise Services;
Chief Administrative Officer
• 2007 – 2009
Executive Vice President, Finance and Enterprise Services; Chief Administrative
Officer
• 2001 – 2007
Executive Vice President; Chief Financial and Enterprise Services Officer
• Member of Intel Corporation Board of Directors
• Member of Columbia Sportswear Company Board of Directors
• Member of McKesson Corporation Board of Directors
• Joined Intel in 1981
Brian M. Krzanich, age 55
Chief Executive Officer
• 2012 – 2013
Executive Vice President; Chief Operating Officer
• 2010 – 2012
Senior Vice President; General Manager, Manufacturing and Supply Chain
• 2006 – 2010
Vice President; General Manager, Assembly and Test
• Member of Deere & Company Board of Directors
Gregory R. Pearson, age 55
Senior Vice President; General Manager, Sales and Marketing Group
• 2008 – 2013
General Manager, Worldwide Sales and Operations Group
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Dr. Venkata S.M. "Murthy" Renduchintala, age 50
Executive Vice President; President, Client and Internet of Things (IoT)
Businesses and Systems Architecture Group
Stacy J. Smith, age 53
Executive Vice President; Chief Financial Officer
• 2010 – 2012
Senior Vice President; Chief Financial Officer
• 2007 – 2010
Vice President; Chief Financial Officer
• 2006 – 2007
Vice President; Assistant Chief Financial Officer
• 2004 – 2006
Vice President; Finance and Enterprise Services, Chief Information Officer
• Member of Autodesk, Inc. Board of Directors
• Member of Virgin America, Inc. Board of Directors
On April 19, 2016, Intel announced a CFO succession plan. Mr. Smith, will transition to a new role at the
Company, leading sales, manufacturing and operations once his successor is in place. The Company is
beginning a formal search process for a new CFO that will assess both internal and external candidates.
Mr. Smith will remain firmly focused on his CFO role and duties throughout the search and transition
process.
8.3
Fraudulent Offences and Bankruptcy, Etc.
For at least the previous five (5) years, none of the directors or executive officers of Intel has:
(a) been convicted in relation to fraudulent offenses;
(b) been associated with any bankruptcies, receiverships or liquidations when acting in their capacity of
directors or executive officers of Intel; or
(c) been subject to any official public incrimination and/or sanctions by statutory or regulatory securities,
commodities, commercial or investment authorities (including designated professional bodies) or ever
been disqualified by a court from acting as a member of the administrative, management or
supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any
issuer.
There is no family relationship among any Intel executive officers or directors.
8.4
Conflicts of Interest
Director Independence
The Board has determined that each of the following non-employee directors qualifies as “independent” in
accordance with the published listing requirements of NASDAQ: Ambassador Barshefsky, Mr. Bhusri,
Ms. Decker, Mr. Donahoe, Mr. Hundt, Dr. Plummer, Mr. Pottruck, Mr. Yeary, and Dr. Yoffie. Because
Mr. Krzanich and Mr. Bryant are employed by Intel, they do not qualify as independent.
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The NASDAQ rules have objective tests and a subjective test for determining who is an “independent
director.” Under the objective tests, a director cannot be considered independent if:
•
The director is, or at any time during the past three years was, an employee of the company;
•
The director or a family member of the director accepted any compensation from the company in
excess of $120,000 during any period of 12 consecutive months within the three years preceding
the independence determination (subject to certain exclusions, including, among other things,
compensation for Board or Board committee service);
•
A family member of the director is, or at any time during the past three years was, an executive
officer of the company;
•
The director or a family member of the director is a partner in, a controlling stockholder of, or an
executive officer of an entity to which the company made, or from which the company received,
payments in the current or any of the past three fiscal years that exceeded 5% of the recipient’s
consolidated gross revenue for that year, or $200,000, whichever was greater (subject to certain
exclusions);
•
The director or a family member of the director is employed as an executive officer of an entity for
which at any time during the past three years, any of the executive officers of the company
served on the compensation committee of such other entity; or
•
The director or a family member of the director is a current partner of the company’s outside
auditor, or at any time during the past three years was a partner or employee of the company’s
outside auditor, and who worked on the company’s audit.
The subjective test states that an independent director must be a person who lacks a relationship that, in
the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. The Board has not established categorical standards or guidelines to make
these subjective determinations, but considers all relevant facts and circumstances.
In addition to the Board-level standards for director independence, the directors who serve on the Audit
Committee each satisfy standards established by the SEC, as no member of the Audit Committee
accepts directly or indirectly any consulting, advisory, or other compensatory fee from the company other
than their director compensation, or otherwise has an affiliate relationship with the company. Similarly, the
members of the Compensation Committee each qualify as independent under NASDAQ standards.
Under these standards, the Board considered that none of the members of the Compensation Committee
accept directly or indirectly any consulting, advisory, or other compensatory fee from the company other
than their director compensation, and that none have any affiliate relationships with the company or other
relationships that would impair the director’s judgment as a member of the Compensation Committee.
Transactions Considered in Independence Determinations
In making its independence determinations, the Board considered transactions that occurred since the
beginning of 2013 between Intel and entities associated with the independent directors or members of
their immediate families.
All of the non-employee directors qualified as “independent” under the objective tests. In making its
subjective determination that each non-employee director is independent, the Board reviewed and
discussed additional information provided by the directors and the company with regard to each director’s
business and personal activities as they may relate to Intel and Intel’s management. The Board
considered the transactions in the context of the NASDAQ objective standards, the special standards
established by the SEC and NASDAQ for members of audit and compensation committees, and the
special SEC and U.S. Internal Revenue Service standards for compensation committee members. Based
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on this review, as required by the NASDAQ rules, the Board made a subjective determination that, based
on the nature of the directors’ relationships with the entity and/or the amount involved, no relationships
exist that, in the opinion of the Board, impair the directors’ independence. The Board’s independence
determinations took into account the following transactions:
Business Relationships. Each of our non-employee directors or one of his or her immediate family
members is, or was during the previous three fiscal years, a non-management director, trustee, advisor,
or executive or served in a similar position at another entity that did business with Intel at some time
during those years. The business relationships were ordinary course dealings as a supplier or purchaser
of goods or services; licensing or research arrangements; facility, engineering, and equipment fees; or
commercial paper or similar financing arrangements in which Intel or an affiliate participated as a creditor.
Payments to or from each of these entities constituted less than the greater of $200,000 or 1% of each of
Intel’s and the recipient’s annual revenue, respectively, in each of the past three years, except as
discussed below.
•
Ambassador Barshefsky is a Partner at the law firm WilmerHale. Ambassador Barshefsky does
not provide any legal services to Intel, and she does not receive any compensation from the firm
that is generated by or related to our payments to the firm. Intel engages a number of law firms,
and has engaged WilmerHale in various significant matters since 1997, before Ambassador
Barshefsky joined either the firm or Intel’s Board. Recognizing that proxy advisory firms have
questioned professional advisory relationships between companies and a director’s firm, the
Board carefully reviewed the nature of Intel’s engagement of WilmerHale and the services
rendered, including the expertise and relevant experience of the firm, the firm’s and specific
partners’ knowledge of Intel and its business and past legal engagements, and the fees paid in
such engagements, and determined that Ambassador Barshefsky’s service on Intel’s Board
should not impair Intel’s ability to engage WilmerHale when Intel determines such engagements
to be in the best interest of Intel and its stockholders. The Board is satisfied that WilmerHale,
when engaged for legal work, is chosen by Intel’s legal group on the basis of the directly relevant
factors of experience, expertise, and efficiency. The fees and expenses paid WilmerHale
represented less than 5% of the firm’s annual revenue in each of the past three years, and
represented less than 0.1% of Intel’s revenue in each year. After considering these fees and
expenses and being briefed on the policies and procedures that WilmerHale has instituted to
confirm that Ambassador Barshefsky has no professional involvement or financial interest in
Intel’s dealings with the firm, the Board (with Ambassador Barshefsky recused) unanimously
determined that Intel’s professional engagement of WilmerHale does not impair Ambassador
Barshefsky’s independence.
•
Mr. Bhusri is CEO and director of Workday, a company with which Intel engages in ordinary
course business transactions. The Board carefully reviewed the nature of Intel’s transactions with
Workday, which primarily related to human resource management solutions contract and
software subscription services, and Mr. Bhusri’s position as CEO and executive director at
Workday. The fees paid Workday represented less than 1.5% of Workday’s annual revenue in
2015, and represented less than 0.03% of Intel’s revenue in 2015. After considering these fees,
the Board (with Mr. Bhusri recused) unanimously determined that Intel’s business transactions
with Workday do not impair Mr. Bhusri’s independence.
•
Mr. Bhusri is a member of the board of directors of Cloudera, a company with which Intel holds
over 10% ownership interest and engages in ordinary course business transactions. The Board
carefully reviewed the nature of Intel’s transactions with Cloudera, which primarily related to
subscription licenses and software support services, and Mr. Bhusri’s position as a nonmanagement director at Cloudera. The fees paid Cloudera represented less than 3.5% of
Cloudera’s annual revenue in each of the past two years, and represented less than 0.02% of
Intel’s revenue in each year. After considering these fees, the Board (with Mr. Bhusri recused)
unanimously determined that Intel’s business transactions with Cloudera do not impair
Mr. Bhusri’s independence.
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•
Dr. Plummer is a member of the board of directors of Cadence, a company with which Intel
engages in ordinary course business transactions. The Board carefully reviewed the nature of
Intel’s transactions with Cadence, which primarily related to electronic design automation
software services, and technology contracts, and Dr. Plummer’s position as a non-management
director at Cadence. The fees paid Cadence represented less than 5.4% of Cadence’s annual
revenue in each of the past three years, and represented less than 0.2% of Intel’s revenue in
each year. After considering these fees, the Board (with Dr. Plummer recused) unanimously
determined that Intel’s business transactions with Cadence do not impair Dr. Plummer’s
independence.
Charitable Contributions. Mr. Donahoe, Mr. Hundt, Dr. Plummer, Mr. Pottruck, Mr. Yeary, Dr. Yoffie, or
one of their immediate family members is serving, or has each served during the previous three fiscal
years, as an executive, professor, or other employee for one or more colleges or universities or as a
director, executive, or employee of a charitable entity that received matching or other charitable
contributions from Intel during those years. Charitable contributions to each of these entities (including
matching and discretionary contributions by Intel and the Intel Foundation) constituted less than $120,000
in each of the past three years, as discussed below.
•
Mr. Hundt was a member of the Advisory Board for the Yale School of Management, the graduate
business school of Yale University, from 1996 until 2014. The Intel Foundation contributed less
than $5,000 in 2013 and 2014 to match Intel employee charitable contributions to Yale University,
amounting to less than 0.001% of Yale University’s consolidated annual revenue for each of 2013
and 2014.
•
Dr. Plummer is a Professor of Electrical Engineering, and was the Dean of the School of
Engineering at Stanford University from 1999 until 2014. The Intel Foundation contributed less
than $20,000 in each of the past three years to match Intel employee charitable contributions to
Stanford University and employee volunteer hours at Stanford under the Intel Involved Matching
Grant Program. The Intel Foundation also contributed $20,000 in 2013 to support the university’s
RISE (Raising Interest in Science and Engineering) Summer Internship Program for high school
students, amounting to less than 0.001% of Stanford’s consolidated annual revenue for each of
the past three years.
•
Mr. Pottruck is a Senior Fellow, Advisory Board Member, and Lecturer at the Wharton School of
Business of the University of Pennsylvania. The Intel Foundation contributed less than $15,000 in
each of the past three years to match Intel employee charitable contributions to the University of
Pennsylvania, amounting to less than 0.001% of the University of Pennsylvania’s consolidated
annual revenue for each of the past three years.
•
Dr. Yoffie is a Professor at Harvard Business School, the graduate business school of Harvard
University. The Intel Foundation contributed less than $5,000 in each of the past three years to
match Intel employee charitable contributions to Harvard University, amounting to less than
0.001% of Harvard’s consolidated annual revenue for each of the past three years.
Certain Relationships and Related Transactions
The Board’s Audit Committee is responsible for review, approval, or ratification of “related-person
transactions” involving Intel or its subsidiaries and related persons. Under SEC rules, a “related person” is
a director, officer, nominee for director, or a greater than 5% stockholder of the company since the
beginning of the previous fiscal year, and their immediate family members. Intel has adopted written
policies and procedures that apply to any transaction or series of transactions in which the company or a
subsidiary is a participant, the amount involved exceeds $120,000, and a related person has a direct or
indirect material interest.
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The Audit Committee has determined that, barring additional facts or circumstances, a related person
does not have a direct or indirect material interest in the following categories of transactions:
•
any transaction with another company for which a related person’s only relationship is as an
employee (other than an executive officer), director, or beneficial owner of less than 10% of that
company’s shares, if the amount involved does not exceed the greater of $1 million or 2% of that
company’s total annual revenue;
•
any charitable contribution, grant, or endowment by Intel or the Intel Foundation to a charitable
organization, foundation, or university for which a related person’s only relationship is as an
employee (other than an executive officer) or a director, if the amount involved does not exceed
the lesser of $1 million or 2% of the charitable organization’s total annual receipts, or any
matching contribution, grant, or endowment by the Intel Foundation;
•
compensation to executive officers determined by the Compensation Committee;
•
compensation to directors determined by the Board;
•
transactions in which all security holders receive proportional benefits; and
•
banking-related services involving a bank depository of funds, transfer agent, registrar, trustee
under a trust indenture, or similar service.
Intel personnel in the Legal and Finance departments review transactions involving related persons that
are not included in one of the preceding categories. If they determine that a related person could have a
significant interest in such a transaction, the transaction is forwarded to the Audit Committee for review.
The Audit Committee determines whether the related person has a material interest in a transaction and
may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. The Audit
Committee reviews all material facts related to the transaction and takes into account, among other
factors it deems appropriate, whether the transaction is on terms no more favorable than terms generally
available to an unaffiliated third party under the same or similar circumstances; the extent of the related
person’s interest in the transaction; and, if applicable, the availability of other sources of comparable
products or services.
Since the beginning of 2015, there were no related-person transactions under the relevant standards.
Code of Conduct
Our Code of Conduct applies to our directors with respect to their Intel-related activities, as well as to our
executive officers and other employees. We expect our directors, executives, and other employees to
avoid any activity that is or has the appearance of being a conflict of interest with Intel. This includes not
engaging in activities that compete with or are adverse to Intel, or that interfere with the proper
performance of duties or responsibilities to Intel, and not using confidential company information,
company assets, or their position at Intel for personal gain in violation of our policy.
Directors and executive officers must inform us of any situation that may be perceived as a conflict of
interest with Intel. The Board oversees resolution of any conflict or apparent conflict involving a director or
executive officer, and may enlist the Legal department to determine whether a conflict exists, and if so,
how to resolve it. Any waivers of these conflict rules with regard to a director or an executive officer
require the prior approval of the Board. Our Code of Conduct is our code-of-ethics document. Our Code
of Conduct is posted on our web site at www.intel.com/governance
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Post-Employment Compensation Arrangements
Intel does not provide change in control benefits to executive officers. Intel provides limited postemployment compensation arrangements to executive officers, including the listed officers i.e., Intel's five
current and former executive officers identified in the “Compensation Discussion and Analysis” section of
Intel's Definitive Proxy Statement, filed with the SEC on April 4, 2016 ("Intel's Proxy Statement")),
consisting of:
•
An employee-funded 401(k) savings plan;
•
A discretionary company-funded retirement contribution plan, and a company-funded pension
plan, each of which is intended to be tax-qualified and available to most U.S. employees;
•
A non-tax-qualified supplemental deferred compensation plan for certain highly compensated
employees; and
•
Retirement acceleration provisions for equity awards.
The company-funded pension plan was closed to new hires starting January 1, 2011.
The Compensation Committee allows the listed officers to participate in these plans to encourage the
officers to save for retirement and to assist the company in retaining the listed officers. The terms
governing the retirement or deferred compensation benefits under these plans for the executive officers
are the same as those available to other eligible employees in the United States.
Intel does not make matching contributions based on the amount of employee contributions under any of
these plans. Instead, Intel’s contribution consists of a discretionary cash contribution determined annually
by the committee for executive officers, and by the CEO for other employees. These contribution
percentages have historically been the same for executive officers and other employees but are made to
different plans depending on employee grade level and start date.
For 2015, Intel’s discretionary contribution (including allocable forfeitures) for eligible U.S. employees,
including executive officers, in the applicable plan equaled 5% of eligible salary (which included annual
and quarterly incentive cash payments as applicable). To the extent that the amount of the contribution is
limited by the Internal Revenue Code of 1986, as amended (tax code), Intel credits the additional amount
to the non-qualified deferred compensation plan. Effective January 1, 2015, plan assets contributed for
U.S. participants and discretionary employer contributions are participant-directed.
Personal Benefits
Intel provides perquisites to executive officers when the Compensation Committee determines that such
arrangements are appropriate and consistent with Intel’s business objectives. In 2015, Intel offered the
listed officers certain financial planning services and provided security arrangements for certain listed
officers. In addition, in 2015, our Board determined to enhance the personal security for our CEO in
response to specific job-related situations. We do not consider these additional security measures to be a
personal benefit for Mr. Krzanich, but rather appropriate expenses for the benefit of Intel that arise out of
his employment and are necessary to his job performance. Intel also provides matching charitable
contributions for all employees of up to $10,000.
Employment Contracts and Change in Control Arrangements
All of Intel’s listed officers are employed at will without employment agreements (subject only to the effect
of local labor laws), and we do not maintain any payment arrangements that would be triggered by a
“change in control” of Intel. From time to time, we have implemented voluntary separation programs to
encourage headcount reduction in particular parts of the company, and these programs have offered
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separation payments to departing employees. However, executive officers generally have not been
eligible for any of these programs or other severance payment arrangements, nor do we generally retain
executive officers following retirement on a part-time or consultancy basis.
On July 1, 2015, the company entered into a Transition Agreement with then President James, pursuant
to which she agreed to remain in her position until January 29, 2016 in exchange for $4 million.
Other Potential Post-Employment Payments
SEC rules require companies to report the amount of benefits that are triggered by termination of
employment. These amounts are reported in the tables under the headings “Accelerated Option Awards”
and “Accelerated Stock Awards” in Intel's Proxy Statement. As noted above, we do not maintain
arrangements for listed officers that are triggered by a change in control.
The tables on pages 66 - 67 of Intel's Proxy Statement report the value of all forms of compensation that
would be available to the listed officers upon the specified events, an amount that is sometimes referred
to as the “walk-away” amount. This amount includes the value of vested equity awards that the listed
officer is entitled to regardless of whether employment is terminated, and the value of vested deferred
compensation and retirement benefits that are also reported in the tables above.
The amounts in the tables on pages 66 - 67 of Intel's Proxy Statement assume that the listed officer left
Intel effective December 26, 2015 (except as otherwise noted) and are based on the price per Share on
the last trading day of the fiscal year ($34.98 on December 24, 2015). Amounts actually received if any of
the listed officers cease to be employed will vary based on factors such as the timing during the year of
any such event, the company’s stock price, the listed officer’s age, and any changes to our benefit
arrangements and policies.
IX.
EMPLOYEES
9.1
Directors’ and Executive Officers’ Holdings of Shares and Options
The following table presents the beneficial ownership of our Shares by each of our directors and listed
officers, and all of our directors and executive officers as a group. This information is as of February 25,
2016, except as otherwise indicated in the notes to the table. Amounts reported under “Number of Shares
of Common Stock Beneficially Owned as of February 25, 2016” include the number of Shares subject to
RSUs and stock options that become exercisable or vest within 60 days of February 25, 2016 (which are
shown in the columns to the right). Our listed officers are the CEO, the CFO, and the three other most
highly compensated executive officers during 2015. Except as otherwise indicated and subject to
applicable community property laws, each owner has sole voting and investment power with respect to
the securities listed. Unless indicated otherwise, the address of each person named in the table is c/o
Intel Corporation, 2200 Mission College Boulevard, Santa Clara, California 95054, U.S.A.
Number of Shares
Number of
Subject to Options Number of
Shares of
Exercisable as of
Common Stock
RSUs That
February 25, 2016 or Vest Within
Beneficially
Which Become
Owned as of
60 Days of
February 25, Percent Exercisable Within 60 February 25,
2016
of Class Days of This Date
2016
1,324,538
**
908,460
31,104
1,069,958(1)
**
445,095
13,502
Directors and Executive Officers
Brian M. Krzanich, Chief Executive Officer
Andy D. Bryant, Chairman of the Board
Stacy J. Smith, Executive Vice President and Chief Financial
Officer
William M. Holt, Executive Vice President, General Manager,
Technology &
Manufacturing Group
Renée J. James, former President
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630,306(2)
**
359,648
16,538
160,907
415,169(3)
**
**
127,142
229,292
13,791
88,122
Directors and Executive Officers
David B. Yoffie, Director
David S. Pottruck, Director
Charlene Barshefsky, Director
John J. Donahoe, Director
Susan L. Decker, Director
Reed E. Hundt, Director
Frank D. Yeary, Director
James D. Plummer, Director
Aneel Bhusri, Director
All directors and executive officers as a group (15 individuals)
Number of Shares
Number of
Subject to Options Number of
Shares of
Exercisable as of
Common Stock
RSUs That
February 25, 2016 or Vest Within
Beneficially
Which Become
Owned as of
60 Days of
February 25, Percent Exercisable Within 60 February 25,
2016
of Class Days of This Date
2016
194,993(4)
**
—
—
104,076(5)
**
—
—
100,260(6)(7)
**
—
—
77,416(8)
**
—
—
75,243
**
—
—
59,018
**
—
—
58,658
**
—
—
50,044(9)
**
—
—
2,066(10)
**
—
—
11
*
4,326,959
**
2,108,207
115,274
Less than 1%.
(1)
Includes 1,600 Shares held by Mr. Bryant’s son, 1,000 Shares held by Mr. Bryant’s daughter, and 24,383 Shares held by a
family trust with Mr. Bryant’s spouse as trustee. Mr. Bryant disclaims beneficial ownership of these Shares. Also includes 1,148
Shares held jointly with Mr. Bryant’s spouse for which Mr. Bryant shares voting and investment power.
(2)
On April 19, 2016, Intel announced a CFO succession plan. Mr. Smith, will transition to a new role at the Company, leading
sales, manufacturing and operations once his successor is in place. The Company is beginning a formal search process for a
new CFO that will assess both internal and external candidates. Mr. Smith will remain firmly focused on his CFO role and
duties throughout the search and transition process.
(3)
Represents Ms. James’ holdings, including the number of Shares subject to RSUs and stock options that become exercisable
or vest within 60 days of January 29, 2016, her last date of employment.
(4)
Includes 159,114 Shares held jointly with Dr. Yoffie’s spouse for which Dr. Yoffie shares voting and investment power.
(5)
Includes 800 Shares held by Mr. Pottruck’s daughter. Also includes a total of 13,400 Shares held in two separate annuity trusts
for the benefit of Mr. Pottruck’s brother for which Mr. Pottruck shares voting and investment power.
(6)
Includes 6,800 Shares held jointly with Ambassador Barshefsky’s spouse for which Ambassador Barshefsky shares voting and
investment power.
(7)
Includes 17,370 deferred but vested RSUs held by Ambassador Barshefsky.
(8)
Includes 68,151 deferred but vested RSUs held by Mr. Donahoe.
(9)
Includes 27,835 Shares held by a family trust for which Dr. Plummer shares voting and investment power.
(10) Includes 999 deferred but vested RSUs held by Mr. Bhusri.
(11) Excludes Ms. James as she was not an executive officer as of February 25, 2016.
9.2
Employee Equity Incentive Plans
Our equity incentive plans are broad-based, long-term programs intended to attract and retain talented
employees and align stockholder and employee interests.
In May 2015, stockholders approved an extension of the expiration date of the 2006 Equity Incentive Plan
(the "2006 Plan") to June 2018 and approved an additional 34 million Shares for issuance. Under the
2006 Plan, 753 million Shares are available for issuance as equity awards to employees and nonemployee directors through June 2018. As of April 2, 2016, 252 million Shares remained available for
future grant under the 2006 Plan through June 2018.
Going forward, we may assume the equity incentive plans and the outstanding equity awards of certain
acquired companies. Once they are assumed, we do not grant additional Shares under those plans. The
stock options and RSUs assumed generally retain their terms and conditions as they were originally
granted.
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In connection with our completed acquisition of Altera, we assumed two of their equity incentive plans
with outstanding unvested stock options and RSUs. The assumed stock options and restricted stock units
generally retained the terms and conditions under which they were originally granted. We will not grant
additional shares under these assumed plans.
We grant RSUs with both a market condition and a service condition (market-based RSUs), referred to in
Intel's Proxy Statement as outperformance stock units ("OSUs"), to a group of senior officers, employees,
and non-employee directors. For OSUs granted in 2015, the number of Shares to be received at vesting
will range from 0% to 200% of the target amount, based on total stockholder return ("TSR") on our Shares
measured against the benchmark TSR of a peer group over a three-year period. TSR is a measure of
stock price appreciation plus any dividends paid in this performance period. As of December 26, 2015,
4.7 million OSUs were outstanding. These OSUs accrue dividend equivalents and generally vest three
years and one month from the grant date. RSU and option awards generally vest over four years from the
grant date. Stock options generally expire seven years from the date of grant.
In May 2015, stockholders approved an extension of the expiration date of the SPP to August 2021. The
SPP allows eligible employees to purchase Shares at 85% of the value of our Shares on specific dates.
Under the SPP, 373 million Shares are available for issuance through August 2021. As of April 2, 2016,
172 million Shares remained available for issuance under the SPP through August 2021.
Restricted Stock Unit Awards
RSU activity in the first three months of 2016 was as follows:
Number of
RSUs
(In Millions)
December 26, 2015
Weighted Average
Grant-Date
Fair Value
107.4
$
26.93
Granted
8.3
$
32.39
Assumed in acquisition
7.3
$
33.79
Vested
(5.3)
$
28.89
Forfeited
(1.8)
$
27.47
$
27.66
April 2, 2016
115.9
The aggregate fair value of awards that vested in the first three months of 2016 was $165 million, which
represents the market value of our Shares on the date that the RSUs vested. The grant-date fair value of
awards that vested in first three months of 2016 was $153 million. The number of RSUs vested includes
Shares that we withheld on behalf of employees to satisfy the minimum statutory tax withholding
requirements. RSUs that are expected to vest are net of estimated future forfeitures.
As of April 2, 2016, 6.9 million of the outstanding RSUs were market-based RSUs.
Stock Option Awards
As of December 26, 2015, options outstanding that have vested and are expected to vest were as
follows:
Weighted
Average
Exercise
Price
Number of
Options
(In Millions)
Vested
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$
21.07
61
Weighted
Average
Remaining
Contractual
Term
(In Years)
Aggregate
Intrinsic
Value
(In Millions)
1.8
$
609
Weighted
Average
Exercise
Price
Number of
Options
(In Millions)
Expected to vest
Total
Weighted
Average
Remaining
Contractual
Term
(In Years)
Aggregate
Intrinsic
Value
(In Millions)
9.6
$
24.07
4.1
$
104
53.4
$
21.61
2.2
$
713
Aggregate intrinsic value represents the difference between the exercise price and $34.98, the closing
price of our Shares on December 24, 2015, as reported on the NASDAQ, for all in-the-money options
outstanding. Options outstanding that are expected to vest are net of estimated future option forfeitures.
Options with a fair value of $42 million completed vesting in 2015 ($68 million in 2014 and $186 million in
2013). As of December 26, 2015, there was $13 million in unrecognized compensation costs related to
stock options granted under our equity incentive plans. We expect to recognize those costs over a
weighted average period of approximately eight months.
Stock option activity for each period was as follows:
Weighted
Average
Exercise
Price
Number of
Options
(In Millions)
December 29, 2012
Granted
Exercised
202.8
$
20.20
20.1
$
22.99
(65.0)
$
18.76
Cancelled and forfeited
(3.0)
$
22.58
Expired
(1.9)
$
22.56
153.0
$
21.10
December 28, 2013
Granted
Exercised
0.6
$
25.34
(63.7)
$
19.87
(2.7)
$
23.70
Expired
(9.9)
$
27.00
December 27, 2014
77.3
$
21.30
—
Granted
Exercised
$
—
(21.9)
$
20.34
(1.1)
$
23.23
Expired
(0.1)
$
20.87
December 26, 2015
54.2
$
21.65
111.5
$
20.25
December 27, 2014
54.7
$
20.29
December 26, 2015
43.8
$
21.07
Options exercisable as of:
December 28, 2013
The aggregate intrinsic value of stock option exercises in 2015 was $284 million ($611 million in 2014 and
$265 million in 2013), which represents the difference between the exercise price and the value of our
Shares at the time of exercise. No stock options were granted during 2015.
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As of December 26, 2015, outstanding options and exercisable options information, by range of exercise
prices, was as follows:
Outstanding Options
Range of Exercise Prices
Number of
Shares
(In Millions)
Exercisable Options
Weighted
Average
Remaining
Contractual
Life
(In Years)
Weighted
Average
Exercise
Price
Weighted
Average
Exercise
Price
Number of
Shares
(In Millions)
$
1.82 - $
15.00
0.4
2.9
$
11.70
0.4
$
11.70
$
15.01 - $
20.00
21.7
0.8
$
18.48
21.7
$
18.48
$
20.01 - $
25.00
24.7
3.1
$
22.92
16.9
$
22.86
$
25.01 - $
27.42
7.4
3.3
$
27.15
4.8
$
27.23
54.2
2.2
$
21.65
43.8
$
21.07
Total
These options will expire if they are not exercised by specific dates through April 2021. Option exercise
prices for options exercised during the three-year period ended December 26, 2015 ranged from $1.12 to
$27.42.
Stock Purchase Plan
Approximately 77% of our employees were participating in our SPP as of December 26, 2015 (76% in
2014 and 76% in 2013). Employees purchased 15.8 million Shares in 2015 for $421 million under the
SPP (19.4 million Shares for $393 million in 2014 and 20.5 million Shares for $369 million in 2013).
Employees purchased 9.2 million Shares in the first three months of 2016 for $227 million (8.1 million
Shares in the first three months of 2015 for $234 million) under the SPP.
X.
WORKING CAPITAL STATEMENT
Intel believes that it has sufficient financial resources to meet its business requirements in the next 12
months, including capital expenditures for worldwide manufacturing and assembly and test; working
capital requirements; and potential dividends, common stock repurchases, debt service, acquisitions, and
strategic investments.
XI.
SELECTED FINANCIAL INFORMATION
11.1
Selected Financial Data
The selected consolidated financial data of Intel set out in this prospectus have been prepared in
accordance with U.S. GAAP. The following selected consolidated statements of income and statements
of cash flows data for the years ended December 26, 2015, December 27, 2014, and December 28,
2013, and selected consolidated balance sheet data as of December 26, 2015, and December 27, 2014,
are derived from Intel’s audited consolidated financial statements contained on pages 31 and 61 – 123 of
Intel’s Form 10-K. The selected consolidated balance sheet data as of December 28, 2013, are derived
from Intel’s audited consolidated financial statements contained on pages 55 – 116 of Intel’s Annual
Report on Form 10-K for the fiscal year ended December 27, 2014, filed with the SEC on February 13,
2015, which is available, free of charge, on the website of the SEC. The following selected consolidated
statements of income and statements of cash flows data for the three months ended April 2, 2016, and
March 28, 2015, and consolidated balance sheet data as of April 2, 2016, are derived from Intel’s
unaudited condensed consolidated financial statements contained on pages 2 – 34 of Intel’s Form 10-Q.
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SELECTED THREE-YEAR FINANCIAL DATA
Years Ended
(Dollars in Millions, Except Per Share Amounts)
Dec 26,
2015
Net revenue
Gross margin
Gross margin percentage
Research and development ("R&D")
Marketing, general and administrative ("MG&A")
R&D and MG&A as percentage of revenue
Operating income
Net income
Effective tax rate
Earnings per share of common stock
Basic
Diluted
Weighted average diluted shares of common stock
outstanding
Dividends per share of common stock
Declared
Paid
Net cash provided by operating activities
Additions to property, plant and equipment
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2.41
2.33
(1)
Total assets
Debt
Temporary equity
$
$
$
$
$
$
2.39
2.31
4,894
5,056
0.96
0.96
19,017
7,326
3,001
4,556
$
0.90
$
0.90
$ 20,418
$ 10,105
$ 10,792
$ 4,409
$ 15,308
$ 31,858
$ 101,459
$ 22,670
$
897
$ 61,085
107.3
Dec 28,
2013
$ 55,870
$ 35,609
63.7%
$ 11,537
$ 8,136
35.2%
$ 15,347
$ 11,704
25.9%
Dec 26,
2015
(Dollars in Millions)
(1)
55,355
34,679
62.6%
12,128
7,930
36.2%
14,002
11,420
19.6%
Dec 27,
2014
$
$
$
$
2,561
33,238
90,012
13,655
912
55,865
106.7
1.94
1.89
5,097
$
$
$
$
$
$
Dec 27,
2014
$
$
$
$
$
$
52,708
31,521
59.8%
10,611
8,088
35.5%
12,291
9,620
23.7%
0.90
0.90
20,776
10,711
2,147
4,479
Dec 28,
2013
$
$
$
$
$
$
5,674
31,428
89,789
13,385
—
58,256
107.6
In the first quarter of 2016, Intel elected to early adopt an amended U.S. accounting standard requiring that Intel classify all
deferred tax assets and liabilities as non-current on the consolidated balance sheet instead of separating deferred taxes into
current and non-current. The amended standard was adopted on a retrospective basis and resulting in a reduction of Intel's
total assets for all periods presented.
During the fourth quarter of 2015, the closing stock price conversion right condition of the 2009
debentures continues to be met and the debentures will be convertible at the option of the holders during
the first quarter of 2016. The excess of the amount of cash payable if converted over the carrying amount
of the 2009 debentures was classified as temporary equity on Intel's consolidated balance sheet. For
further information, see "Note 15: Borrowings" in Part II, Item 8 of Intel's Form 10-K.
During 2013, 2015 and 2016, management approved several restructuring actions, including targeted
workforce reductions as well as exit of certain businesses and facilities. For further information, see "Note
13: Restructuring and Asset Impairment Charges" in Part II, Item 8 of Intel's Form 10-K, and "Note 12.
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Restructuring and Asset Impairment Charges" in Part I, Item 1 of Intel's Form 10-Q. Please also refer to
the 2016 Restructuring Program described above in Element B.4a.
SELECTED QUARTERLY FINANCIAL DATA
Consolidated Condensed Statements of Income:
Three Months Ended
Apr 2,
Mar 28,
2016
2015
(Dollars in Millions, Except Per Share Amounts – unaudited)
Net revenue
Gross margin
R&D
Operating income
Net income
Basic earnings per share of common stock
Diluted earnings per share of common stock
Cash dividends declared per share of common stock
Weighted average shares of common stock outstanding:
Basic
Diluted
$
$
$
$
$
$
$
$
13,702
8,130
3,246
2,568
2,046
0.43
0.42
0.52
$
$
$
$
$
$
$
$
4,722
4,875
12,781
7,730
2,995
2,615
1,992
0.42
0.41
0.48
4,741
4,914
Consolidated Condensed Balance Sheets:
Dec 26,
*
2015
Apr 2,
2016
(Amounts in millions – unaudited)
Total assets
Debt
Temporary equity
* Derived from audited consolidated balance sheet.
$
$
$
$
$
$
3,061
32,644
105,467
25,369
894
61,174
$
$
$
$
$
$
15,308
31,858
101,459
22,670
897
61,085
During the first quarter of 2016, the closing stock price conversion right condition of the 2009 debentures
continued to be met and the debentures will be convertible at the option of the holders during the second
quarter of 2016. As a result, the $1.1 billion carrying amount of the 2009 debentures was classified as
short-term debt on Intel's consolidated condensed balance sheet as of April 2, 2016 ($1.1 billion as of
December 26, 2015). The excess of the amount of cash payable if converted over the carrying amount of
the 2009 debentures of $894 million has been classified as temporary equity on Intel's consolidated
condensed balance sheet as of April 2, 2016 ($897 million as of December 26, 2015).
11.2
Independent Registered Public Accounting Firm
The independent registered public accounting firm of Intel is Ernst & Young LLP, San Jose, California,
U.S.A. Ernst & Young LLP is registered with the Public Company Accounting Oversight Board (United
States) and a member of the American Institute of Certified Public Accountants.
XII.
DOCUMENTS ON DISPLAY
Intel uses its Investor Relations web site, www.intc.com, as a routine channel for distribution of important
information, including news releases, analyst presentations, and financial information. Intel posts filings
on its website the same day they are electronically filed with, or furnished to, the SEC, including its annual
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and quarterly reports on Forms 10-K and 10-Q and current reports on Form 8-K; its proxy statements; and
any amendments to those reports or statements. Intel posts its quarterly and annual earnings results on
its Investor Relations website, at www.intc.com/results.cfm, and does not distribute its financial results via
a news wire service. All such postings and filings are available on Intel's Investor Relations web site free
of charge. In addition, Intel's Investor Relations web site allows interested persons to sign up to
automatically receive e-mail alerts when the Company posts news releases and financial information. The
SEC’s web site, www.sec.gov, contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
Intel’s Form 10-K, Intel’s Form 10-Q and Intel’s Proxy Statement, referred to in this prospectus, may be
obtained free of charge upon request by an employee.
Intel expects to issue, on July 20, 2016, its earnings release for the quarter ended July 2, 2016. The
quarterly report on Form 10-Q for such quarter will be filed with the SEC no later than August 11, 2016.
The annual report on Form 10-K for the fiscal year ending December 31, 2016, will be filed with the SEC
no later than March 1, 2017. These documents will be available on the websites of Intel and the SEC,
indicated above.
XIII.
TAX CONSEQUENCES
13.1
Austrian Tax Consequences
The following summary is based on the income and social tax laws in effect in Austria as of the date of
this prospectus. Tax and other laws are complex and can change frequently. As a result, the information
below may be out of date at the time the Participant purchases Shares or sells Shares under the SPP.
The following applies only to Participants who are Austrian residents for tax purposes. If the Participant is
a citizen or resident of another country, transfers employment and/or residency between countries after
enrollment, or is considered a resident of another country for local law purposes, the income and social
tax information below may not be applicable in the same manner. Furthermore, this information is
general in nature and does not discuss all of the various laws, rules and regulations that may apply. It
may not apply to each Participant’s particular tax or financial situation, and Intel is not in a position to
assure him or her of any particular tax result.
The Participants are strongly advised to consult their own independent personal tax advisors as to how
the tax or other laws in their country apply to their specific situations.
Enrollment in the SPP
The Participant is not subject to tax when he or she enrolls in the SPP or a new Subscription Period
begins.
Purchase of Shares
At purchase, the Participant will be subject to income tax and social taxes on the difference between the
value of the Shares on the Purchase Date and the Purchase Price.
Dividends
If Shares are acquired under the SPP, dividends may be paid with respect to those Shares if Intel, in its
discretion, declares a dividend. Any dividends paid will be subject to tax in Austria if the Participant
exceeds both the exemption for dividend income and the exemption for other forms of income not subject
to wage tax withholding. Any dividends paid will also be subject to U.S. federal tax withheld at source.
The Participant may be entitled to a tax credit in Austria for the U.S. federal tax withheld.
3714744-v9\
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Sale of Shares
When the shares acquired under the SPP are subsequently sold, the Participant will be subject to tax on
the difference between the sale price and the value of the Shares on the Purchase Date.
Withholding and Reporting
The Participant’s employer is required to report and withhold income tax and social taxes at purchase. It
is the Participant’s responsibility to report and pay taxes due as a result of the sale of Shares or the
receipt of any dividends.
13.2
Danish Tax Consequences
The following summary is based on the income and social tax laws in effect in Denmark as of the date of
The following applies only to Participants who are Danish residents for tax purposes. If the Participant is
begins.
Purchase of Shares
value of the Shares on the Purchase Date and the Purchase Price. Church taxes, which vary by
municipality, may also apply.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to share income tax in Denmark and
also to U.S. federal tax withheld at source. The Participant may be entitled to a tax credit in Denmark for
the U.S. federal tax withheld.
Sale of Shares
When the shares acquired under the SPP are subsequently sold, the Participant will be subject to share
income tax on the difference between the sale price and the value of the Shares on the Purchase Date.
The Participant’s employer is required to report, but not withhold income tax or social taxes at purchase.
Since no income tax or social tax withholding is required, Participants are responsible for making any
3714744-v9\
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required payments directly to the government. It is also the Participant’s responsibility to report and pay
taxes as a result of the sale of Shares or the receipt of any dividends.
13.3
Finnish Tax Consequences
The following summary is based on the income and social tax laws in effect in Finland as of the date of
The following applies only to Participants who are Finnish residents for tax purposes. If the Participant is
begins.
Purchase of Shares
At purchase, the Participant will be subject to income tax, social taxes (including the health insurance
premium) and church tax, if applicable, on the difference between the value of the Shares on the
Purchase Date and the Purchase Price.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to income tax in Finland and also to
U.S. federal tax withheld at source. The Participant may be entitled to a tax credit in Finland for the U.S.
federal tax withheld.
Sale of Shares
When the shares acquired under the SPP are subsequently sold, the Participant will be subject to tax,
generally on the difference between the sale price and the value of the Shares on the Purchase Date.
However, when determining the taxable gain, the Participant may deduct from the sales price of the
Shares sold either: (A) the acquisition cost of the Shares (i.e., the purchase price plus the discount at
purchase) plus any costs the Participant incurs in connection with the gains, or (B) a deemed acquisition
cost of 20% of the sales price. If method (B) is used, no other costs relating to acquiring or selling the
Shares can be deducted. If the Shares are held for at least 10 years, a deemed acquisition cost of 40%
of the sales price is used for method (B).
The Participant’s employer is required to report and withhold income tax, social taxes (including the
health insurance premium) and church tax, if applicable, at purchase. It is the Participant’s responsibility
to report and pay taxes due as a result of the sale of Shares or the receipt of any dividends.
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13.4
French Tax Consequences
The following summary is based on the income and social tax laws in effect in France as of the date of
The following applies only to Participants who are French residents for tax purposes. If the Participant is
begins.
Purchase of Shares
At purchase, the Participant will be subject to income tax and social security contributions on the
difference between the value of the Shares on the Purchase Date and the Purchase Price.
Wealth Tax
The Shares acquired under the SPP are included in the Participant's personal estate for wealth tax
purposes.
Dividends
discretion, declares a dividend. Any dividends paid with respect to the Shares will be subject to personal
income tax in France in principle after application of an allowance. The gross amount of any dividends
will be subject to additional social taxes in France. The Participant may have to file a tax return and pay
advance income tax and social taxes, on the gross amount of the dividends, within 15 days of the month
following the receipt of the dividends depending on the Participant’s personal tax situation. In the year
following the year of receipt of the dividends, the Participant will need to report the amount of the
dividends and advance taxes paid in connection with the dividends in his or her tax return and may be
entitled to a refund or may need to pay additional personal income tax.
Any dividends paid will also be subject to U.S. federal tax withheld at the source. The Participant may be
entitled to a tax credit against his or her French income tax, provided that there is fulfillment of the
formalities of the August 31, 1994 tax treaty between France and the United States.
Surtax
An additional 3% surtax on all types of income exceeding €250,000 (for single taxpayers) or €500,000 (for
married taxpayers), and a 4% surtax on income exceeding €500,000 (for single taxpayers) or €1,000,000
(for married taxpayers). This surtax will apply to all types of income received during the tax year
(including the difference between the value of the Shares on the Purchase Date and the Purchase Price,
any capital gains at sale of the Shares and the receipt of any dividends). If the Participant may be subject
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to the surtax, the Participant should contact his or her personal tax advisor regarding the availability of a
surtax reduction.
Sale of Shares
the difference between the net sale price and the value of the Shares on the Purchase Date. A rebate
may apply, depending on the amount of time the Shares were held. Additional social taxes are also due
on the capital gain, a portion of which is deductible for French personal income tax purposes in the year
during which the payment of such social taxes is made.
The Participant’s employer is required to report the income but is not required to withhold income tax at
purchase, provided the Participant remains a French tax resident and works continuously in France from
the start of the relevant Subscription Period to purchase. In this case, since no income tax withholding is
required, the Participant is responsible for making any required payments directly to the government.
The Participant’s employer will report and withhold social security contributions at purchase. It is the
Participant’s responsibility to report and pay taxes due as a result of the sale of Shares or the receipt of
any dividends.
13.5
German Tax Consequences
The following summary is based on the income and social tax laws in effect in Germany as of the date of
The following applies only to Participants who are German residents for tax purposes. If the Participant is
begins.
Purchase of Shares
value of the Shares on the Purchase Date and the Purchase Price. The Participant will also be subject to
a solidarity surcharge and, if applicable, church tax on the income tax liability.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to tax at a flat rate (plus solidarity
surcharge and, if applicable, church tax on the tax liability). Any dividends paid will also be subject to
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U.S. federal tax withheld at source. The Participant may be entitled to a tax credit against his or her
German income tax for the U.S. federal tax withheld.
Sale of Shares
When the shares acquired under the SPP are subsequently sold, the Participant will be subject to tax,
generally at a flat rate, on the difference between the sale price and the value of the Shares on the
Purchase Date (assuming the Participant does not hold, and has not held at any time during the last five
years, 1% or more of the stated capital of Intel and the shares are not held as a business asset). The
Participant will also be subject to solidarity surcharge and, if applicable, church tax on the tax liability.
The Participant’s employer is required to report and withhold income tax, social taxes, surcharge and,
applicable, church tax at purchase. It is the Participant’s responsibility to report and pay taxes due as a
result of the sale of Shares or the receipt of any dividends.
13.6
Irish Tax Consequences
The following summary is based on the income and social tax laws in effect in Ireland as of the date of
below may be out of date at the time the Participant purchases Shares or sells Shares under the SPP or
Irish Plans, as applicable.
The following applies only to Participants who are Irish residents for tax purposes. If the Participant is a
citizen or resident of another country, transfers employment and/or residency between countries after
THE SPP
begins.
Purchase of Shares
At purchase, the Participant will be subject to income tax, the Universal Social Charge (“USC”) and PRSI
on the difference between the value of the Shares on the Purchase Date and the Purchase Price.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to tax in Ireland and also to U.S.
federal tax withheld at source. The Participant may be entitled to a tax credit against his or her Irish
income tax for the U.S. federal tax withheld.
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Sale of Shares
the difference between the sale price and the value of the Shares on the Purchase Date, subject to the
Participant’s annual capital gains tax exemption.
The Participant’s employer will withhold and report income tax, the PRSI and the USC at purchase.
The Participant is required to report the purchase of Shares on his or her annual tax return on or before
31 October following the end of the tax year in which the Shares were purchased. It is also the
any dividends.
THE IRISH PLANS
Enrollment in the Irish Plans
The Irish Participant will not be subject to tax when he or she enrolls in the Irish Plans.
Purchase of Shares
The Irish Participant will not be subject to income tax when he or she is allocated Shares under the Irish
Plans (assuming applicable limits are not exceeded), but Universal Social Charge (“USC”) and PRSI
(employee) will be due on the value of the Shares appropriated.
Dividends
If Shares are acquired under the Irish Plans, dividends may be paid with respect to those Shares if Intel,
in its discretion, declares a dividend. Any dividends paid will be subject to tax in Ireland and to U.S.
federal tax withheld at source. The Irish Participant may be entitled to a tax credit for the U.S. federal tax
withheld.
Sale or Transfer of Shares
If the Irish Participant leaves the Shares with the trustee for three years following the purchase, the Irish
Participant will have no liability for income tax on the value of the Shares.
If the Irish Participant requests a transfer of Shares from the trustee within three years of allocation, he or
she will be required to pay to the trustee, prior to the transfer, an amount equal to the income tax payable
at the Irish Participant’s marginal income tax rate on the amount the Irish Participant originally paid for the
Shares. The trustee will pay this tax to the Revenue Commissioners and it will be set against the Irish
Participant’s final liability for income tax arising out of the transfer of Shares.
If the sale proceeds of any Shares sold by the trustee on behalf of an Irish Participant or by the Irish
Participant are greater than the original value of the Shares acquired under the Irish Plans, then the
difference between the sale price and the fair market value of the Shares on the Purchase Date will be
subject to capital gains tax (“CGT”) to the extent it exceeds the Irish Participant’s annual CGT exemption.
The Irish Participant’s employer is not required to withhold income tax or social taxes when the Shares
are purchased under the Irish Plans. However, the trustee will report the bonuses granted, the allocation
and appropriation of Shares under the Irish Plans, and certain other information to the Revenue
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Commissioners. It is the Irish Participant’s responsibility to report and pay any taxes resulting from the
early transfer of Shares, the sale of Shares and the receipt of any dividends.
13.7
Dutch Tax Consequences
The following summary is based on the income and social tax laws in effect in the Netherlands as of the
date of this prospectus. Tax and other laws are complex and can change frequently. As a result, the
information below may be out of date at the time the Participant purchases Shares or sells Shares under
the SPP.
The following applies only to Participants who are Dutch residents for tax purposes. If the Participant is a
begins.
Purchase of Shares
value of the Shares on the Purchase Date and the Purchase Price.
Investment Yield Tax
The Shares acquired under the SPP are included in the Participant's personal estate for investment yield
tax purposes.
Dividends
discretion, declares a dividend. Any dividends paid will be not subject to tax in the Netherlands (provided
the Participant holds less than a 5% interest in Intel as a private investment), but will be subject to U.S.
federal tax withheld at source. The Participant may be entitled to a tax credit against his or her Dutch
Sale of Shares
When the shares acquired under the SPP are subsequently sold, the Participant will not be subject to tax
(provided the Participant holds less than a 5% interest in Intel).
The Participant’s employer is required to report and withhold income tax and social taxes at purchase. It
is the Participant’s responsibility to report and pay taxes due as a result of the sale of Shares or the
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13.8
Polish Tax Consequences
The following summary is based on the income and social tax laws in effect in Poland as of the date of
The following applies only to Participants who are Polish residents for tax purposes. If the Participant is a
begins.
Purchase of Shares
At purchase, the Participant will be subject to income tax, but not social taxes, on the difference between
the value of the Shares on the Purchase Date and the Purchase Price.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to tax in Poland and also to U.S.
federal tax withheld at source. The Participant may be entitled to a tax credit against his or her Polish
Sale of Shares
the difference between the sale price and Purchase Price. However, the portion of the gain at sale that
was taxed at purchase should constitute a tax-deductible cost.
The Participant’s employer is not required to report or withhold income tax at purchase. Since no income
tax is required, Participants are responsible for making any required payments directly to the government.
It is also the Participant’s responsibility to report and pay taxes due as a result of the sale of Shares or the
13.9
Romanian Tax Consequences
The following summary is based on the income and social tax laws in effect in Romania as of the date of
The following applies only to Participants who are Romanian residents for tax purposes. If the Participant
is a citizen or resident of another country, transfers employment and/or residency between countries after
3714744-v9\
74
The Participant is not subject to tax when he or she enrolls in the SPP (or is offered the opportunity to
participate in the SPP).
Purchase of Shares
At purchase, the Participant will be subject to income tax and social insurance contributions on the
difference between the value of the Shares on the Purchase Date and the Purchase Price.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to dividend tax in Romania and to U.S.
federal withholding tax. The Participant may be entitled to a tax credit in Romania for the U.S. federal tax
withheld.
Sale of Shares
the difference between the sale price and the value of the Shares on the Purchase Date (or the difference
between the sale price and the Purchase Price if the Participant was not taxed at purchase).
The Participant’s employer will withhold and report income tax and social insurance contributions on the
taxable amount at purchase. It is the Participant’s responsibility to report and pay taxes due as a result of
sale of Shares or the receipt of any dividends on his or her own tax return.
13.10
Swedish Tax Consequences
The following summary is based on the income and social tax laws in effect in Sweden as of the date of
The following applies only to Participants who are Swedish residents for tax purposes. If the Participant
is a citizen or resident of another country, transfers employment and/or residency between countries after
3714744-v9\
75
begins.
Purchase of Shares
At purchase, the Participant will be subject to income tax, but not social taxes (except the general pension
contribution), on the difference between the value of the Shares on the Purchase Date and the Purchase
Price.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to capital income tax in Sweden and
also to U.S. federal tax withheld at source. The Participant may be entitled to a tax credit in Sweden for
the U.S. federal tax withheld.
Sale of Shares
the capital gain (i.e., the difference between the sale price and the value of the Shares on the Purchase
Date). As an alternative, the Participant may elect to calculate the taxable capital gain as the sale price of
the shares less 20%.
The Participant’s employer is required to report and withhold income tax at purchase. It is the
any dividends.
13.11
United Kingdom Tax Consequences
The following summary is based on the income and social tax laws in effect in the United Kingdom (the
“U.K.”) as of the date of this prospectus. Tax and other laws are complex and can change frequently. As
a result, the information below may be out of date at the time the Participant purchases Shares or sells
Shares under the SPP.
The following applies only to Participants who are resident and ordinarily resident in the United Kingdom.
If the Participant is a citizen or resident of another country, transfers employment and/or residency
between countries after enrollment, or is considered a resident of another country for local law purposes
or if he or she is not treated as resident, ordinarily resident and domiciled in the United Kingdom, then the
income and social tax information below may not be applicable in the same manner. Furthermore, this
information is general in nature and does not discuss all of the various laws, rules and regulations that
may apply. It may not apply to each Participant’s particular tax or financial situation, and Intel is not in a
position to assure him or her of any particular tax result.
begins.
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76
Purchase of Shares
At purchase, the Participant will be subject to income tax and employees’ national insurance contributions
(“NICs”) on the difference between the value of the Shares on the Purchase Date and the Purchase
Price.
Dividends
discretion, declares a dividend. Any dividends paid will be subject to tax in the U.K. and to U.S. federal
tax withheld at source. The Participant may be entitled to a tax credit against his or her U.K. income tax
for the U.S. federal tax withheld.
Sale of Shares
the difference between the sale price and the value of the Shares on the Purchase Date, subject to an
annual exemption.
The Participant’s employer is required to report and withhold income tax and NICs at purchase. It is the
any dividends.
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EXHIBITS
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78
EXHIBIT I
INTEL CORPORATION 2006 STOCK PURCHASE PLAN,
AS AMENDED AND RESTATED
3714744-v9\
I
INTEL CORPORATION
2006 STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purpose of the Plan is to provide an opportunity for Employees of Intel Corporation, a Delaware corporation (“Intel”) and its
Participating Subsidiaries (collectively Intel and its Participating Subsidiaries shall be referred to as the “Company”), to purchase
Common Stock of Intel and thereby to have an additional incentive to contribute to the prosperity of the Company. It is the
intention of the Company that the Plan (excluding any sub-plans thereof except as expressly provided in the terms of such subplan) qualify as an “Employee Stock Purchase Plan” under Section 423 of the U.S. Internal Revenue Code of 1986, as amended
(the “Code”), and the Plan shall be administered in accordance with this intent. In addition, the Plan authorizes the grant of
options pursuant to sub-plans or special rules adopted by the Committee designed to achieve desired tax or other objectives in
particular locations outside of the United States or to achieve other business objectives in the determination of the Committee,
which sub-plans shall not be required to comply with the requirements of Section 423 of the Code or all of the specific provisions
of the Plan, including but not limited to terms relating to eligibility, Subscription Periods or Purchase Price.
SECTION 2. DEFINITIONS
(a) “Applicable Law” shall mean the legal requirements relating to the administration of an employee stock purchase plan under
applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, the Code, any stock exchange rules
or regulations and the applicable laws of any other country or jurisdiction, as such laws, rules, regulations and requirements
shall be in place from time to time.
(b) “Board” shall mean the Board of Directors of Intel.
(c) “Code” shall mean the Internal Revenue Code of 1986, as such is amended from time to time, and any reference to a section
of the Code shall include any successor provision of the Code.
(d) “Commencement Date” shall mean the last Trading Day prior to February 1 for the Subscription Period commencing on
February 20 and the last Trading Day prior to August 1 for the Subscription Period commencing on August 20.
(e) “Committee” shall mean the Compensation Committee of the Board or the subcommittee, officer or officers designated by
the Compensation Committee in accordance with Section 15 of the Plan (to the extent of the duties and responsibilities
delegated by the Compensation Committee of the Board).
(f) “Common Stock” shall mean the common stock of Intel, par value $.001 per share, or any securities into which such
Common Stock may be converted.
(g) “Compensation” shall mean the total compensation paid by the Company to an Employee with respect to a Subscription
Period, including salary, commissions, overtime, shift differentials, payouts from Intel’s Employee Cash Bonus Program
(ECBP), payouts from the Employee Bonus (EB) program, and all or any portion of any item of compensation considered by
the Company to be part of the Employee’s regular earnings, but excluding items not considered by the Company to be part
of the Employee’s regular earnings. Items excluded from the definition of “Compensation” include but are not limited to such
items as relocation bonuses, expense reimbursements, certain bonuses paid in connection with mergers and acquisitions,
author incentives, recruitment and referral bonuses, foreign service premiums, differentials and allowances, imputed income
pursuant to Section 79 of the Code, income realized as a result of participation in any stock option, restricted stock, restricted
stock unit, stock purchase or similar equity plan maintained by Intel or a Participating Subsidiary, and tuition and other
reimbursements. The Committee shall have the authority to determine and approve all forms of pay to be included in the
definition of Compensation and may change the definition on a prospective basis.
1
(h) “Effective Date” shall mean July 31, 2006.
(i) “Employee” shall mean an individual classified as an employee (within the meaning of Code Section 3401(c) and the
regulations thereunder) by Intel or a Participating Subsidiary on Intel’s or such Participating Subsidiary’s payroll records
during the relevant participation period. Notwithstanding the foregoing, no employee of Intel or a Participating Subsidiary
shall be included within the definition of “Employee” if such person’s customary employment is for less than twenty (20)
hours per week or for less than five (5) months per year. Individuals classified as independent contractors, consultants,
advisers, or members of the Board are not considered “Employees.”
(j) “Enrollment Period” shall mean, with respect to a given Subscription Period, that period beginning on the first (1st) day of
February and August and ending on the nineteenth (19th) day of February and August during which Employees may elect to
participate in order to purchase Common Stock at the end of that Subscription Period in accordance with the terms of this
Plan. The duration and timing of Enrollment Periods may be changed or modified by the Committee.
(k) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and any reference to a
section of the Exchange Act shall include any successor provision of the Exchange Act.
(l) “Market Value” on a given date of determination (e.g., a Commencement Date or Purchase Date, as appropriate) shall mean
the value of Common Stock determined as follows: (i) if the Common Stock is listed on any established stock exchange (not
including an automated quotation system), its Market Value shall be the closing sales price for a share of the Common Stock
(or the closing bid, if no sales were reported) on the date of determination as quoted on such exchange on which the
Common Stock has the highest average trading volume, as reported in The Wall Street Journal or such other source as the
Committee deems reliable, or (ii) if the Common Stock is listed on a national market system and the highest average trading
volume of the Common Stock occurs through that system, its Market Value shall be the average of the high and the low
selling prices reported on the date of determination, as reported in The Wall Street Journal or such other source as the
Committee deems reliable, or (iii) if the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Market Value shall be the average of the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall Street Journal or such other source as the
Committee deems reliable, or, (iv) in the absence of an established market for the Common Stock, the Market Value thereof
shall be determined in good faith by the Board.
(m) “Offering Price” shall mean the Market Value of a share of Common Stock on the Commencement Date for a given
Subscription Period.
(n) “Participant” shall mean a participant in the Plan as described in Section 5 of the Plan.
(o) “Participating Subsidiary” shall mean a Subsidiary that has been designated by the Committee in its sole discretion as
eligible to participate in the Plan with respect to its Employees.
(p) “Plan” shall mean this 2006 Stock Purchase Plan, including any sub-plans or appendices hereto.
(q) “Purchase Date” shall mean the last Trading Day of each Subscription Period.
(r) “Purchase Price” shall have the meaning set out in Section 8(b).
(s) “Securities Act” shall mean the U.S. Securities Act of 1933, as amended from time to time, and any reference to a section of
the Securities Act shall include any successor provision of the Securities Act.
(t) “Stockholder” shall mean a record holder of shares entitled to vote such shares of Common Stock under Intel’s by-laws.
(u) “Subscription Period” shall mean a period of approximately six (6) months at the end of which an option granted pursuant to
the Plan shall be exercised. The Plan shall be implemented by a series of Subscription Periods of approximately six (6)
months duration, with new Subscription Periods commencing on each February 20 and August 20 occurring on or after the
Effective Date and ending on the last Trading Day in the six (6) month period ending on the following August 19 and
February 19, respectively. The duration and timing of Subscription Periods may be changed or modified by the Committee.
2
(v) “Subsidiary” shall mean any entity treated as a corporation (other than Intel) in an unbroken chain of corporations beginning
with Intel, within the meaning of Code Section 424(f), whether or not such corporation now exists or is hereafter organized or
acquired by Intel or a Subsidiary.
(w) “Trading Day” shall mean a day on which U.S. national stock exchanges and the NASDAQ National Market System are open
for trading and the Common Stock is being publicly traded on one or more of such markets.
SECTION 3. ELIGIBILITY
(a) Any Employee employed by Intel or by any Participating Subsidiary on a Commencement Date shall be eligible to participate
in the Plan with respect to the Subscription Period first following such Commencement Date, provided that the Committee
may establish administrative rules requiring that employment commence some minimum period (not to exceed 30 days) prior
to a Commencement Date to be eligible to participate with respect to such Subscription Period. The Committee may also
determine that a designated group of highly compensated Employees is ineligible to participate in the Plan so long as the
excluded category fits within the definition of “highly compensated employee” in Code Section 414(q).
(b) No Employee may participate in the Plan if immediately after an option is granted the Employee owns or is considered to
own (within the meaning of Code Section 424(d)) shares of Common Stock, including Common Stock which the Employee
may purchase by conversion of convertible securities or under outstanding options granted by Intel or its Subsidiaries,
possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of Intel or of any of
its Subsidiaries. All Employees who participate in the Plan shall have the same rights and privileges under the Plan, except
for differences that may be mandated by local law and that are consistent with Code Section 423(b)(5); provided that
individuals participating in a sub-plan adopted pursuant to Section 17 which is not designed to qualify under Code section
423 need not have the same rights and privileges as Employees participating in the Code section 423 Plan. No Employee
may participate in more than one Subscription Period at a time.
SECTION 4. SUBSCRIPTION PERIODS
The Plan shall generally be implemented by a series of six (6) month Subscription Periods with new Subscription Periods
commencing on each February 20 and August 20 and ending on the last Trading Day in the six (6) month periods ending on the
following August 19 and February 19, respectively, or on such other date as the Committee shall determine, and continuing
thereafter until the Plan is terminated pursuant to Section 14 hereof. The first Subscription Period shall commence on August 21,
2006 and shall end on the last Trading Day on or before February 19, 2007. The Committee shall have the authority to change
the frequency and/or duration of Subscription Periods (including the commencement dates thereof) with respect to future
Subscription Periods if such change is announced at least thirty (30) days prior to the scheduled occurrence of the first
Commencement Date to be affected thereafter.
SECTION 5. PARTICIPATION
(a) An Employee who is eligible to participate in the Plan in accordance with its terms on a Commencement Date shall
automatically receive an option in accordance with Section 8(a) and may become a Participant by completing and submitting,
on or before the date prescribed by the Committee with respect to a given Subscription Period, a completed payroll
deduction authorization and Plan enrollment form provided by Intel or its Participating Subsidiaries or by following an
electronic or other enrollment process as prescribed by the Committee. An eligible Employee may authorize payroll
deductions at the rate of any whole percentage of the Employee’s Compensation, not to be less than two percent (2%) and
not to exceed five percent (5%) of the Employee’s Compensation (or such other percentages as the Committee may
establish from time to time before a Commencement Date) of such Employee’s Compensation on each payday during the
Subscription Period. All payroll deductions will be held in a general corporate account or a trust account. No interest shall be
paid or credited to the Participant with respect to such payroll deductions. Intel shall maintain or cause to be maintained a
separate bookkeeping account for each Participant under the Plan and the amount of each Participant’s payroll deductions
shall be credited to
3
such account. A Participant may not make any additional payments into such account, unless payroll deductions are
prohibited under Applicable Law, in which case the provisions of Section 5(b) of the Plan shall apply.
(b) Notwithstanding any other provisions of the Plan to the contrary, in locations where local law prohibits payroll deductions, an
eligible Employee may elect to participate through contributions to his or her account under the Plan in a form acceptable to
the Committee. In such event, any such Employees shall be deemed to be participating in a sub-plan, unless the Committee
otherwise expressly provides that such Employees shall be treated as participating in the Plan. All such contributions will be
held in a general corporate account or a trust account. No interest shall be paid or credited to the Participant with respect to
such contributions.
(c) Under procedures and at times established by the Committee, a Participant may withdraw from the Plan during a
Subscription Period, by completing and filing a new payroll deduction authorization and Plan enrollment form with the
Company or by following electronic or other procedures prescribed by the Committee. If a Participant withdraws from the
Plan during a Subscription Period, his or her accumulated payroll deductions will be refunded to the Participant without
interest, his or her right to participate in the current Subscription Period will be automatically terminated and no further payroll
deductions for the purchase of Common Stock will be made during the Subscription Period. Any Participant who wishes to
withdraw from the Plan during a Subscription Period, must complete the withdrawal procedures prescribed by the Committee
before the last forty-eight (48) hours of such Subscription Period, subject to any changes to the rules established by the
Committee pertaining to the timing of withdrawals, limiting the frequency with which Participants may withdraw and re-enroll
in the Plan and may impose a waiting period on Participants wishing to re-enroll following withdrawal.
(d) A Participant may not increase his or her rate of contribution through payroll deductions or otherwise during a given
Subscription Period. A Participant may decrease his or her rate of contribution through payroll deductions one time only
during a given Subscription Period and only during an open enrollment period or such other times specified by the
Committee by filing a new payroll deduction authorization and Plan enrollment form or by following electronic or other
procedures prescribed by the Committee. If a Participant has not followed such procedures to change the rate of
contribution, the rate of contribution shall continue at the originally elected rate throughout the Subscription Period and future
Subscription Periods; unless the Committee reduces the maximum rate of contribution provided in Section 5(a) and a
Participant’s rate of contribution exceeds the reduced maximum rate of contribution, in which case the rate of contribution
shall continue at the reduced maximum rate of contribution. Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code for a given calendar year, the Committee may reduce a Participant’s payroll deductions to
zero percent (0%) at any time during a Subscription Period scheduled to end during such calendar year. Payroll deductions
shall re-commence at the rate provided in such Participant’s enrollment form at the beginning of the first Subscription Period
which is scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section 5(c).
SECTION 6. TERMINATION OF EMPLOYMENT
In the event any Participant terminates employment with Intel and its Participating Subsidiaries for any reason (including death)
prior to the expiration of a Subscription Period, the Participant’s participation in the Plan shall terminate and all amounts credited
to the Participant’s account shall be paid to the Participant or, in the case of death, to the Participant’s heirs or estate, without
interest. Whether a termination of employment has occurred shall be determined by the Committee. If a Participant’s termination
of employment occurs within a certain period of time as specified by the Committee (not to exceed 30 days) prior to the
Purchase Date of the Subscription Period then in progress, his or her option for the purchase of shares of Common Stock will be
exercised on such Purchase Date in accordance with Section 9 as if such Participant were still employed by the Company.
Following the purchase of shares on such Purchase Date, the Participant’s participation in the Plan shall terminate and all
amounts credited to the Participant’s account shall be paid to the Participant or, in the case of death, to the Participant’s heirs or
estate, without interest. The Committee may also establish rules regarding when leaves of absence or changes of employment
status will be considered to be a termination of employment, including rules regarding transfer
4
of employment among Participating Subsidiaries, Subsidiaries and Intel, and the Committee may establish termination-ofemployment procedures for this Plan that are independent of similar rules established under other benefit plans of Intel and its
Subsidiaries; provided that such procedures are not in conflict with the requirements of Section 423 of the Code.
SECTION 7. STOCK
Subject to adjustment as set forth in Section 11, the maximum number of shares of Common Stock which may be issued
pursuant to the Plan shall be three hundred seventy-three million (373,000,000) shares. Notwithstanding the above, subject to
adjustment as set forth in Section 11, the maximum number of shares that may be purchased by any Employee in a given
Subscription Period shall be seventy two thousand (72,000) shares of Common Stock. If, on a given Purchase Date, the number
of shares with respect to which options are to be exercised exceeds either maximum, the Committee shall make, as applicable,
such adjustment or pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be
practicable and as it shall determine to be equitable.
SECTION 8. OFFERING
(a) On the Commencement Date relating to each Subscription Period, each eligible Employee, whether or not such Employee
has elected to participate as provided in Section 5(a), shall be granted an option to purchase that number of whole shares of
Common Stock (as adjusted as set forth in Section 11) not to exceed seventy two thousand (72,000) shares (or such lower
number of shares as determined by the Committee), which may be purchased with the payroll deductions accumulated on
behalf of such Employee during each Subscription Period at the purchase price specified in Section 8(b) below, subject to
the additional limitation that no Employee participating in the Plan shall be granted an option to purchase Common Stock
under the Plan if such option would permit his or her rights to purchase stock under all employee stock purchase plans
(described in Section 423 of the Code) of Intel and its Subsidiaries to accrue at a rate which exceeds U.S. twenty-five
thousand dollars (U.S. $25,000) of the Market Value of such Common Stock (determined at the time such option is granted)
for each calendar year in which such option is outstanding at any time. For purposes of the Plan, an option is “granted” on a
Participant’s Commencement Date. An option will expire upon the earliest to occur of (i) the termination of a Participant’s
participation in the Plan or such Subscription Period (ii) the beginning of a subsequent Subscription Period in which such
Participant is participating; or (iii) the termination of the Subscription Period. This Section 8(a) shall be interpreted so as to
comply with Code Section 423(b)(8).
(b) The Purchase Price under each option shall be with respect to a Subscription Period the lower of (i) a percentage (not less
than eighty-five percent (85%)) established by the Committee (“Designated Percentage”) of the Offering Price, or (ii) the
Designated Percentage of the Market Value of a share of Common Stock on the Purchase Date on which the Common
Stock is purchased; provided that the Purchase Price may be adjusted by the Committee pursuant to Sections 11 or 12 in
accordance with Section 424(a) of the Code. The Committee may change the Designated Percentage with respect to any
future Subscription Period, but not to below eighty-five percent (85%), and the Committee may determine with respect to any
prospective Subscription Period that the option price shall be the Designated Percentage of the Market Value of a share of
the Common Stock on the Purchase Date.
SECTION 9. PURCHASE OF STOCK
Unless a Participant withdraws from the Plan as provided in Section 5(c) or except as provided in Sections 7, 12 or 14(b), upon
the expiration of each Subscription Period, a Participant’s option shall be exercised automatically for the purchase of that number
of whole shares of Common Stock which the accumulated payroll deductions credited to the Participant’s account at that time
shall purchase at the applicable price specified in Section 8(b). Notwithstanding the foregoing, Intel or its Participating Subsidiary
may make such provisions and take such action as it deems necessary or appropriate for the withholding of taxes and/or social
insurance which Intel or its Participating Subsidiary determines is required by Applicable Law. Each Participant, however, shall
be responsible for payment of all individual tax liabilities arising under the Plan.
5
The shares of Common Stock purchased upon exercise of an option hereunder shall be considered for tax purposes to be sold
to the Participant on the Purchase Date. During his or her lifetime, a Participant’s option to purchase shares of Common Stock
hereunder is exercisable only by him or her.
SECTION 10. PAYMENT AND DELIVERY
As soon as practicable after the exercise of an option, Intel shall deliver or cause to have delivered to the Participant a record of
the Common Stock purchased and the balance of any amount of payroll deductions credited to the Participant’s account not
used for the purchase, except as specified below. The Committee may permit or require that shares be deposited directly with a
broker designated by the Committee or to a designated agent of the Company, and the Committee may utilize electronic or
automated methods of share transfer. The Committee may require that shares be retained with such broker or agent for a
designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares.
Intel or its Participating Subsidiary shall retain the amount of payroll deductions used to purchase Common Stock as full payment
for the Common Stock and the Common Stock shall then be fully paid and non-assessable. No Participant shall have any voting,
dividend, or other Stockholder rights with respect to shares subject to any option granted under the Plan until the shares subject
to the option have been purchased and delivered to the Participant as provided in this Section 10. The Committee may in its
discretion direct Intel to retain in a Participant’s account for the subsequent Subscription Period any payroll deductions which are
not sufficient to purchase a whole share of Common Stock or to return such amount to the Participant. Any other amounts left
over in a Participant’s account after a Purchase Date shall be returned to the Participant without interest.
SECTION 11. RECAPITALIZATION
Subject to any required action by the Stockholders of Intel, if there is any change in the outstanding shares of Common Stock
because of a merger, consolidation, spin-off, reorganization, recapitalization, dividend in property other than cash, stock split,
reverse stock split, stock dividend, liquidating dividend, combination or reclassification of the Common Stock (including any such
change in the number of shares of Common Stock effected in connection with a change in domicile of Intel), or any similar equity
restructuring transaction (as that term is used in Accounting Standards Codification 718), the number of securities covered by
each option under the Plan which has not yet been exercised and the number of securities which have been authorized and
remain available for issuance under the Plan, as well as the maximum number of securities which may be purchased by a
Participant in a Subscription Period, and the price per share covered by each option under the Plan which has not yet been
exercised, shall be equitably adjusted by the Board, and the Board shall take any further actions which may be necessary or
appropriate under the circumstances. The Board’s determinations under this Section 11 shall be conclusive and binding on all
parties.
SECTION 12. MERGER, LIQUIDATION, OTHER CORPORATE TRANSACTIONS
(a) In the event of the proposed liquidation or dissolution of Intel, the Subscription Period will terminate immediately prior to the
consummation of such proposed transaction, unless otherwise provided by the Board in its sole discretion, and all
outstanding options shall automatically terminate and the amounts of all payroll deductions will be refunded without interest
to the Participants.
(b) In the event of a proposed sale of all or substantially all of the assets of Intel, or the merger or consolidation or similar
combination of Intel with or into another entity, then in the sole discretion of the Board, (1) each option shall be assumed or
an equivalent option shall be substituted by the successor corporation or parent or subsidiary of such successor entity, (2) a
date established by the Board on or before the date of consummation of such merger, consolidation, combination or sale
shall be treated as a Purchase Date, and all outstanding options shall be exercised on such date, (3) all outstanding options
shall terminate and the accumulated payroll deductions will be refunded without interest to the Participants, or (4)
outstanding options shall continue unchanged.
6
SECTION 13. TRANSFERABILITY
Neither payroll deductions credited to a Participant’s bookkeeping account nor any rights to exercise an option or to receive
shares of Common Stock under the Plan may be voluntarily or involuntarily assigned, transferred, pledged, or otherwise
disposed of in any way, and any attempted assignment, transfer, pledge, or other disposition shall be null and void and without
effect. If a Participant in any manner attempts to transfer, assign or otherwise encumber his or her rights or interests under the
Plan, other than as permitted by the Code, such act shall be treated as an election by the Participant to discontinue participation
in the Plan pursuant to Section 5(c).
SECTION 14. AMENDMENT OR TERMINATION OF THE PLAN
(a) The Plan shall continue from the Effective Date until August 31, 20162021, unless it is terminated in accordance with Section
14(b).
(b) The Board may, in its sole discretion, insofar as permitted by law, terminate or suspend the Plan, or revise or amend it in any
respect whatsoever, and the Committee may revise or amend the Plan consistent with the exercise of its duties and
responsibilities as set forth in the Plan or any delegation under the Plan, except that, without approval of the Stockholders,
no such revision or amendment shall increase the number of shares subject to the Plan, other than an adjustment under
Section 11 of the Plan, or make other changes for which Stockholder approval is required under Applicable Law. Upon a
termination or suspension of the Plan, the Board may in its discretion (i) return without interest, the payroll deductions
credited to Participants’ accounts to such Participants or (ii) set an earlier Purchase Date with respect to a Subscription
Period then in progress.
SECTION 15. ADMINISTRATION
(a) The Board has appointed the Compensation Committee of the Board to administer the Plan (the “Committee”), who will
serve for such period of time as the Board may specify and whom the Board may remove at any time. The Committee will
have the authority and responsibility for the day-to-day administration of the Plan, the authority and responsibility specifically
provided in this Plan and any additional duty, responsibility and authority delegated to the Committee by the Board, which
may include any of the functions assigned to the Board in this Plan. The Committee may delegate to a sub-committee or to
an officer or officers of Intel the day-to-day administration of the Plan. The Committee shall have full power and authority to
adopt, amend and rescind any rules and regulations which it deems desirable and appropriate for the proper administration
of the Plan, to construe and interpret the provisions and supervise the administration of the Plan, to make factual
determinations relevant to Plan entitlements and to take all action in connection with administration of the Plan as it deems
necessary or advisable, consistent with the delegation from the Board. Decisions of the Committee shall be final and binding
upon all Participants. Any decision reduced to writing and signed by all of the members of the Committee shall be fully
effective as if it had been made at a meeting of the Committee duly held. The Company shall pay all expenses incurred in
the administration of the Plan.
(b) In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of the
Company, members of the Board and of the Committee shall be indemnified by the Company against all reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right granted under the Plan, and against all amounts paid
by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company)
or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional
misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding,
such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.
7
SECTION 16. COMMITTEE RULES FOR FOREIGN JURISDICTIONS
The Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the
specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Committee is specifically
authorized to adopt rules and procedures regarding handling of payroll deductions or other contributions by Participants,
payment of interest, conversion of local currency, data privacy security, payroll tax, withholding procedures and handling of stock
certificates which vary with local requirements; however, if such varying provisions are not in accordance with the provisions of
Section 423(b) of the Code, including but not limited to the requirement of Section 423(b)(5) of the Code that all options granted
under the Plan shall have the same rights and privileges unless otherwise provided under the Code and the regulations
promulgated thereunder, then the individuals affected by such varying provisions shall be deemed to be participating under a
sub-plan and not in the Plan. The Committee may also adopt sub-plans applicable to particular Subsidiaries or locations, which
sub-plans may be designed to be outside the scope of Code section 423 and shall be deemed to be outside the scope of Code
section 423 unless the terms of the sub-plan provide to the contrary. The rules of such sub-plans may take precedence over
other provisions of this Plan, with the exception of Section 7, but unless otherwise superseded by the terms of such sub-plan, the
provisions of this Plan shall govern the operation of such sub-plan. The Committee shall not be required to obtain the approval of
the Stockholders prior to the adoption, amendment or termination of any sub-plan unless required by the laws of the foreign
jurisdiction in which Employees participating in the sub-plan are located.
SECTION 17. SECURITIES LAWS REQUIREMENTS
(a) No option granted under the Plan may be exercised to any extent unless the shares to be issued upon such exercise under
the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material
compliance with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act, the
Exchange Act, the rules and regulations promulgated thereunder, applicable state and foreign securities laws and the
requirements of any stock exchange upon which the Shares may then be listed, subject to the approval of counsel for the
Company with respect to such compliance. If on a Purchase Date in any Subscription Period hereunder, the Plan is not so
registered or in such compliance, options granted under the Plan which are not in material compliance shall not be exercised
on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration
statement and such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the
Purchase Date shall in no event be more than twenty-seven (27) months from the Commencement Date relating to such
Subscription Period. If, on the Purchase Date of any offering hereunder, as delayed to the maximum extent permissible, the
Plan is not registered and in such compliance, options granted under the Plan which are not in material compliance shall not
be exercised and all payroll deductions accumulated during the Subscription Period (reduced to the extent, if any, that such
deductions have been used to acquire shares of Common Stock) shall be returned to the Participants, without interest. The
provisions of this Section 17 shall comply with the requirements of Section 423(b)(5) of the Code to the extent applicable.
(b) As a condition to the exercise of an option, Intel may require the person exercising such option to represent and warrant at
the time of any such exercise that the Shares are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for Intel, such a representation is required by any of the
aforementioned applicable provisions of law.
SECTION 18. GOVERNMENTAL REGULATIONS
This Plan and Intel’s obligation to sell and deliver shares of its stock under the Plan shall be subject to the approval of any
governmental authority required in connection with the Plan or the authorization, issuance, sale, or delivery of stock hereunder.
8
SECTION 19. NO ENLARGEMENT OF EMPLOYEE RIGHTS
Nothing contained in this Plan shall be deemed to give any Employee or other individual the right to be retained in the employ or
service of Intel or any Participating Subsidiary or to interfere with the right of Intel or Participating Subsidiary to discharge any
Employee or other individual at any time, for any reason or no reason, with or without notice.
SECTION 20. GOVERNING LAW
This Plan shall be governed by applicable laws of the State of Delaware and applicable federal law.
SECTION 21. EFFECTIVE DATE
This Plan shall be effective on the Effective Date, subject to approval of the Stockholders of Intel within twelve (12) months
before or after its date of adoption by the Board.
SECTION 22. REPORTS
Individual accounts shall be maintained for each Participant in the Plan. Statements of account shall be made available to
Participants at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the
number of shares of Common Stock purchased and the remaining cash balance, if any.
SECTION 23. DESIGNATION OF BENEFICIARY FOR OWNED SHARES
With respect to shares of Common Stock purchased by the Participant pursuant to the Plan and held in an account maintained
by Intel or its assignee on the Participant’s behalf, the Participant may be permitted to file a written designation of beneficiary,
who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s
death subsequent to the end of a Subscription Period but prior to delivery to him or her of such shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the
Plan in the event of such Participant’s death prior to the Purchase Date of a Subscription Period. If a Participant is married and
the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective, to the extent
required by local law. The Participant (and if required under the preceding sentence, his or her spouse) may change such
designation of beneficiary at any time by written notice. Subject to local legal requirements, in the event of a Participant’s death,
Intel or its assignee shall deliver any shares of Common Stock and/or cash to the designated beneficiary. Subject to local law, in
the event of the death of a Participant and in the absence of a beneficiary validly designated who is living at the time of such
Participant’s death, Intel shall deliver such shares of Common Stock and/or cash to the executor or administrator of the estate of
the Participant, or if no such executor or administrator has been appointed (to the knowledge of Intel), Intel in its sole discretion,
may deliver (or cause its assignee to deliver) such shares of Common Stock and/or cash to the spouse, or to any one or more
dependents or relatives of the Participant, or if no spouse, dependent or relative is known to Intel, then to such other person as
Intel may determine. The provisions of this Section 23 shall in no event require Intel to violate local law, and Intel shall be entitled
to take whatever action it reasonably concludes is desirable or appropriate in order to transfer the assets allocated to a deceased
Participant’s account in compliance with local law.
SECTION 24. ADDITIONAL RESTRICTIONS OF RULE 16b-3.
The terms and conditions of options granted hereunder to, and the purchase of shares of Common Stock by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to contain,
and such options shall contain, and the shares of Common Stock issued upon exercise thereof shall be subject to, such
additional conditions and restrictions, if any, as may be required by Rule 16b-3 to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.
SECTION 25. NOTICES
All notices or other communications by a Participant to Intel or the Committee under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by Intel or the Committee at the location, or by the person,
designated by Intel for the receipt thereof.
9
EXHIBIT II
DESCRIPTION OF THE IRISH PLANS
3714744-v9\
II
INTEL CONFIDENTIAL
INTEL CORPORATION
DESCRIPTION OF THE
IRISH PLANS
1.
INTRODUCTION
Each Irish Plan is a Revenue approved, tax efficient Scheme which enables you to invest
some or all of your bonuses in the purchase of Intel stock. Neither is an Intel profit
sharing plan – each merely represents an alternative method of paying existing bonuses.
The purpose of the Irish Plans is to enable you to become a shareholder in Intel. You can
do this in a tax efficient manner by using some/all of your Quarterly Profit Bonus (QBP)
and Annual Performance Bonus (APB) to buy shares in Intel through a “Profit Sharing
Trust”. This Trust is administered by Mercer Ltd. (an international benefits company) on
Intel’s behalf.
Once you decide to invest in the Irish Plans, the gross proceeds of your bonuses are
invested in the purchase of Intel shares. Those shares are held in trust for you for three
years. During the first two years you cannot sell them, unless you die, retire or are made
redundant. If you decide to sell your shares after two years have expired but before three
years has lapsed, you will pay tax on the original sum invested.
The shares purchased on your behalf are bought at the fair market value (FMV) of stock
on the date on which the transaction takes place. (Unlike the Share Purchase Plan (SPP),
you do not buy them at a discount.)
2.
3.
ADVANTAGES OF THE SCHEME
A.
As a shareholder, you share in the success of Intel through growth
in the value of your shares, although, you should be aware that the
value of your shares can fall as well as rise.
B.
On the appropriation of shares to the participant, no income tax
charge but USC and PRSI (employee) will be due on the value of
the shares appropriated. If you wait to sell the shares until three
years after you acquired them, you will not pay any PAYE income
tax.
ELIGIBILITY FOR MEMBERSHIP
For the purposes of the Irish Plans programme at Intel Ireland, such benefits apply only to
Intel Regular Full Time (RFT) and Intel Regular Part Time (RPT) from whom Intel
deducts PAYE and PRSI, and apply only in respect of the period of service for which
such deductions are actually made.
You must be an employee of Intel (or active on payroll) on the day on which the shares
are purchased - if you leave Intel’s employment before the last payroll when the shares
6647058-v2\GESDMS
1
INTEL CONFIDENTIAL
are purchased, no shares will be purchased on your behalf and your savings will be
refunded net of taxes.
4.
WHAT INCOME MAY BE INVESTED
You may invest some/all of your QPB and some/all of your APB in the Scheme.
The Revenue sets limits on how much you can invest. All of the following limits must be
satisfied before an investment can take place:
5.
6.
7.
A.
The maximum which can be paid into the Plan in one tax year is
€12,700 from all sources, QPB, APB).
B.
You can invest an APB target of 1.01% of Base pay (the common
element of APB for all employees) multiplied by a payout factor as
set forth in the Irish Plans.
PAYROLL RULES
A.
Employees may enroll in the Irish Plans during the enrolment dates
listed below.
B.
Employees must enroll for each bonus plan separately.
IMPORTANT PLAN DATES 2016
A.
The deadline to allocate your APB is January 24, 2016. If you do
not allocate your bonus it will be paid in cash along with your
salary on February 11th.
B.
The deadline to allocate your QPB is January 10th, April 17th, July
10th, and October 16th. If you do not allocate your bonus it will
be paid in cash along with your salary on January 28th, May 5th ,
July 28th and November 3rd respectively for 2015 Q4, 2016 Q1,
2016 Q2 and 2016 Q3.
YOUR CORRECT
INFORMATION)
ADDRESS ON MERCER
RECORDS
(IMPORTANT
It is important that you keep a current up to date address with Mercer. You must update
the Mercer Share Scheme Department with any change of address. Change of address
cannot be accepted over the phone.
Send your updated address by post:
Mercer Ltd.
Share Schemes Department -CHG-8
Charlotte House
Charlemont Street
Dublin 2
6647058-v2\GESDMS
2
INTEL CONFIDENTIAL
BY FAX:
01-4782883
BY E-MAIL:
[email protected]
ON WEBSITE:
Log on to www.oneview.mercer.ie, go into the shares portal to update personal details.
Please note that Mercer is signed up to NewAddress.ie and any changes made on their
website are automatically forwarded to Mercer.
8.
WHAT HAPPENS AFTER MERCER HAVE HELD MY SHARES FOR 3
YEARS?
Three years after the date of acquisition of the shares, the Scheme for the Irish Plans
comes to an end. You may now sell or transfer them without attracting any additional
taxes on the original sum you invested.
Three years after you purchase your shares, Mercer will notify you of the imminent
vesting of your shares and send you a Form of Election. You will be offered the
following choices;
a.
b.
Sell the shares
Transfer to a private stock broker of choice
If you do not indicate to Mercer Ltd. where you would like the shares to be invested and
Mercer Ltd. has no broker details on file they will automatically default to sell the shares.
If Mercer Ltd. has alternative broker details and an account number on record, the shares
will automatically be transferred to this account if no Form of Election is returned.
PLEASE NOTE: Employees can nominate any stock broker of their choice for
transferring of mature Irish Plan shares. Ownership and cost of the private stock broker is
employees total responsibility.
9.
PRIVATE STOCK BROKERS / DOLMEN STOCKBROKERS
NOTE** Historically, employees may have used Dolmen as a private stock broker in
order to transfer and hold matured Irish Plan shares. If you have a private stock account
with Dolmen Stockbrokers or any other private stock broker, it is important that you
contact them to ensure that they have a correct up to date home address. Failure to do so
may result in additional broker fees and / or your Irish Plan shares being sold.
NOTE*** Effective beginning with the 2011 tax year, new tax legislation was
implemented in the U.S. which requires stock brokers outside the U.S. to file tax returns
for customers who reside in the U.S. for more than 30 days. If you have resided in the
U.S. for greater than 30 days, you should contact your private stock broker to ensure that
6647058-v2\GESDMS
3
INTEL CONFIDENTIAL
they are aware of your position. Possible impact could be a requirement to transfer
shares out of the account, depending on your stock broker.
10.
SELLING THE SHARES
It is a condition of the Scheme (laid down by the Revenue Authorities) that the shares
may not be sold, pledged or transferred, or dealt with in any way for at least two years
after they have been allocated to you (except in the event of your death, redundancy or
retirement at age 65).
After two years have expired, you may sell your shares, have them transferred into your
own name, or the name of another person, subject to income tax. You may also leave
them in the Trust. If you decide to sell your shares before three years have expired, you
will pay taxes on the original sum invested.
11.
TAXATION
If you hold your shares for three years or more, no income tax, or additional PRSI or
USC will be payable on the original sum invested. However, if the shares have increased
in value between the time of purchase and the time of sale, the gain made will attract
CGT at 33%.
If you sell your shares within two to three years of acquisition, you will be required to
pay income tax on the original sum you invested at your marginal tax rate, i.e., 20% or
40%, plus any applicable USC.
If the shares have increased in value over the two years, the gain made will also attract
Capital Gains Tax (CGT).
Each individual has a €1,270 capital gains allowance per year. This means you can make
a €1,270 capital gain without attracting Capital Gains Tax. Any further gain will attract
Capital Gains Tax at 33%. This allowance is not transferable between spouses. You are
required to report your capital gains annually in your annual tax return. For further
information on Capital Gains Tax please contact the Revenue.
12.
REGULAR COMMUNICATIONS
Each time you participate in the Plan and buy some shares, you will be issued with a
Notice of Appropriation which details the number of shares purchased, the purchase
price, the vesting date etc. You will also be sent a Form of Election before each maturity.
These will be issued to you by Mercer Ltd. and will be mailed to your home address.
13.
PAYMENT OF DIVIDEND
A dividend is a discretionary payment made by the Board of Directors to a Shareholder.
Any dividends received in respect of the shares which have been allocated to you will be
forwarded to you net of the standard rate of income tax by the Trustees of the Plan. You
will also be sent a tax voucher by the Trustees certifying that the standard rate of income
tax has been deducted.
6647058-v2\GESDMS
4
INTEL CONFIDENTIAL
Depending on your effective rate of tax, you may be liable to pay further tax on dividends
and in any event, you are obliged to include details of the dividends received on your tax
returns.
14.
TERMINATION OR DEATH
If you leave Intel as a result of redundancy, disability, injury or retirement at the age of
65, you may dispose of the shares, even within two years of allocation. Income tax will
be charged on 50% of the original sum you invested.
In the event of the death of a member, his or her shareholding will be sold by the Trustees
and the proceeds will be paid to his/her estate. No income tax is charged, regardless of
how long the shares are held in trust.
If you leave Intel for any reason other than the above, it will have no effect on your rights
or obligations. You will continue to hold your shares in the Irish Plans, and the normal
rules regarding the sale or transfer of shares apply.
15.
MERCER OneVIEW
Mercer OneView now allows you to manage your Intel shares held in the Irish Plans.
You can now track your share performance and access forms to transfer or sell your
shares online using OneView.*
To access the Share section of Mercer OneView:
A.
Access Mercer OneView;
B.
Enter your Employer Code (Intel), your Employee WWID and
your personal access code (PAC);
C.
Select the My Shares tab from top of screen; and
D.
Choose Option required on the left hand side of My Shares Screen.
If you have not yet received your PAC, contact Mercer Ltd. directly by email or
telephone at 01 6039880.
6647058-v2\GESDMS
5
INTEL CONFIDENTIAL
CONTRACT OF PARTICIPATION
Important
I have read the outline explaining the rules of the scheme in the “Profit Sharing in Intel” above.
In consideration of my participation in the scheme and of any appropriation to me of Scheme
Shares in accordance with the provision of the Scheme, I bind myself in contract with the
company and I agree to be bound by the Rules of the scheme and in particular:
A.
to permit Scheme Shares appropriated to me to be held by the trustees throughout the
applicable Period of Retention;
B.
not to assign, charge or otherwise dispose of my beneficial interest in the said Scheme
Shares during the Period of Retention;
C.
not to direct the trustees to dispose of the said Scheme Shares before the applicable
Release Date in any other way except as mentioned in paragraph (D);
D.
or by sale for the best consideration in money that can reasonably be obtained at the time
of the sale; and
E.
if I direct the trustees to transfer the ownership of any of the said Scheme Shares into my
name before the applicable Release Date, to pay the trustees before the transfer takes
place, a sum equal to the income tax (if any) then payable at the standard rate on the
Appropriate Percentage of the Locked-In value of the said Scheme Shares at the time of
the direction as notified to me by the trustees.
I accept that the dividend tax voucher which I will receive from the trustees in respect of any
Scheme Shares will be in full satisfaction of any rights I have to a tax deduction certificate from
the trustees.
I hereby direct the trustees, in the absence of any further direction from me, in the event of a
rights issue to sell all rights in respect of my Scheme Shares nil paid and pay the proceeds to me
and in the event of any other offer or transaction in respect of my Scheme Shares take such
action, if any, as will not require me to put the trustees in funds.
I undertake to notify the trustees of any change in my home address.
I understand that this contract will bind me in respect of any subsequent appropriation of Scheme
Shares unless I shall have previously varied its terms by notice in writing addressed to the
Company and the trustees.
Important
Please ensure you have read Contract of Participation above.
I agree to the terms and conditions of the Contract of Participation (above). I authorize Intel to
supply information as necessary to outside agencies responsible for the administration of
employee investment plans. Data supplied by Intel will be used only for that purpose stated
above.
6647058-v2\GESDMS
6
INTEL CONFIDENTIAL
IRISH PLANS Q&A
I.
How much will this cost?
Different private stock brokers have different charges for various share transactions. Some have
a flat annual fee while other charge per share transaction. Please contact your private stock
broker to get details of these costs.
II.
Can Intel negotiate with Dolmen on their costs?
No. Dolmen is a private stock broker with no contractual agreements with Intel. Ownership of
private stock account is the sole responsibility of the account holder.
III.
Will Intel covering the cost of the APSS share transfer?
No. As these are private stock accounts, Intel has no control over the costs of Share transactions.
However, it should be noted that Intel employees are advised to research the best options
available to them. There are many excellent value on-line stock brokers which offer better value
& services than the current Ireland-based stock brokers.
IV.
Do I have to have my private stock account with Dolmen?
No. Dolmen is just one of many private stock brokers available to employees. Like all services,
Intel would advice employees to research the market in order to find the best value stock account
service for themselves.
V.
When does the US tax legislation become effective?
The change became effective on January 1, 2011. However, this new tax legislation affects
Ireland-based stock brokers and not account holders.
VI.
Does Intel recommend a particular stock broker that I should open a account with?
No. Intel does not recommend any particular stock broker. However, a quick search of the
Internet will reveal a myriad of options open to you.
6647058-v2\GESDMS
7
EXHIBIT III
CURRENT REPORT ON FORM 8-K FURNISHED BY INTEL CORPORATION
TO THE SEC ON APRIL 19, 2016
3714744-v9\
III
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report: April 19, 2016
(Date of earliest event reported)
INTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
000-06217
(Commission
File Number)
2200 Mission College Blvd., Santa Clara, California
(Address of principal executive offices)
94-1672743
(IRS Employer
Identification No.)
95054-1549
(Zip Code)
(408) 765-8080
(Registrant's telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions ( see
General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))
Item 2.02
Results of Operations and Financial Condition.
On April 19, 2016, Intel Corporation (“Intel”) issued a press release announcing the financial results of its fiscal quarter ended April
2, 2016 and forward-looking statements relating to its second quarter of 2016 and full year 2016. A copy of this press release is
attached hereto as Exhibit 99.1 and is incorporated by reference herein.
On April 19, 2016, Intel also posted financial information and commentary by Stacy J. Smith, Intel’s Executive Vice President and
Chief Financial Officer, for its fiscal quarter ended April 2, 2016 on its investor website, intc.com. A copy of this information and
commentary is attached hereto as Exhibit 99.2 and is incorporated by reference herein.
Exhibits 99.1 and 99.2 includes non-GAAP financial measures relating to our operations and forecasted outlook. Certain of these
non-GAAP terms will be used in Intel’s Q1 2016 earnings conference. In addition, Exhibits 99.1 and 99.2 include reconciliations of
these GAAP to non-GAAP measures, as well as an explanation of how management uses these non-GAAP measures and the reasons
why management views these measures as providing useful information for investors. These non-GAAP financial measures should
not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and the financial results
calculated in accordance with GAAP and reconciliations from Intel’s results should be carefully evaluated.
The information in Item 2.02 of this Report, as well as Exhibits 99.1 and 99.2, are furnished and shall not be treated as filed for
purposes of the Securities Exchange Act of 1934, as amended.
Item 2.05
Costs Associated with Exit or Disposal Activities.
On April 19, 2016, Intel announced a restructuring plan designed to align its operations with evolving business needs and improve
efficiencies. The actions associated with the restructuring plan are expected to be fully completed by the second quarter of 2017. The
restructuring plan is estimated to result in annualized pre-tax cost savings of approximately $1.4 billion once it is fully implemented.
Under the restructuring plan, Intel plans to close certain facilities and reduce up to twelve thousand positions globally, representing
approximately 11% of Intel’s worldwide workforce. Intel expects to incur pre-tax charges of approximately $1.2 billion,
substantially all of which are related to employee severance and benefits. Intel expects to recognize these charges during the second
quarter of fiscal 2016 and expects substantially all the charges to entail cash expenditures.
Item 2.05 of this Report (“Item 2.05”) contains “forward-looking statements” as defined in the Private Securities Litigation Reform
Act of 1995, which are identified by words such as “plans,” “expects,” “may,” “believes,” “estimates” or “estimated, “intends,” and
other similar words, expressions, and formulations. Item 2.05 contains forward-looking statements regarding the timing and scope of
the restructuring plan; the size of the restructuring plan and the amount and timing of the related charges; and the expected cost
savings resulting from the restructuring plan. Many factors could affect the actual results of the restructuring plan, and variances
from Intel's current expectations regarding such factors could cause actual results of the restructuring plan to differ materially from
those expressed in these forward-looking statements. Intel presently considers the following to be a non-exclusive list of important
factors that could cause actual results to differ materially from its expectations: the timing and execution of plans and programs that
may be subject to local labor law requirements, including consultation with appropriate works councils; assumptions related to
severance, post-retirement costs, and relocation costs; future acquisitions, dispositions, or investments; new business initiatives and
changes in product roadmap, development, and manufacturing; and/or assumptions related to cost savings, product demand and
operating efficiencies. A detailed discussion of these and other risks and uncertainties that could cause Intel’s actual results to differ
materially from these forward-looking statements is included in the documents that Intel files with the Securities and Exchange
Commission on Forms 10-K, 10-Q and 8-K. These forward-looking statements speak only as of the date of this Report, and Intel
does not undertake any obligation to revise or update such statements, whether as a result of new information, future events, or
otherwise.
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
On April 19, 2016, Intel announced a Chief Financial Officer (“CFO”) succession plan. Stacy Smith, 53, who has served as
Executive Vice President and CFO since 2012, will transition to a new senior executive role at the company, leading sales,
manufacturing and operations once his successor is in place.
Mr. Smith joined Intel in 1988. From 2010 to 2012, he served as Senior Vice President and CFO. From 2007 to 2010, he was Vice
President and CFO. From 2006 to 2007, Mr. Smith was Vice President and Assistant CFO. From 2004 to 2006, he served as Vice
President, Finance and Enterprise Services, and Chief Information Officer. From 2002 to 2004, he served as Vice President, Sales
and Marketing Group, and General Manager of Intel Europe, Middle East and Africa (EMEA).
Item 7.01
Regulation FD Disclosure.
On April 19, 2016, Intel issued a press release, attached hereto as Exhibit 99.3, announcing a restructuring plan designed to align its
operations with evolving business needs and improve efficiencies.
The information in Item 7.01 of this Report is furnished and shall not be treated as filed for purposes of the Securities Exchange Act
of 1934, as amended.
Item 9.01
(d)
Financial Statements and Exhibits.
Exhibits.
The following exhibits are furnished as part of this Report:
Exhibit Number
99.1
99.2
99.3
Description
Press Release issued by Intel entitled “Intel Reports First-Quarter GAAP
Revenue of $13.7 Billion; Non-GAAP Revenue of $13.8 Billion,” dated
April 19, 2016.
Commentary by Intel’s Chief Financial Officer regarding the quarter
ended April 2, 2016.
Press Release issued by Intel entitled “Intel Announces Restructuring
Initiative to Accelerate Transformation,” dated April 19, 2016.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned hereunto duly authorized.
INTEL CORPORATION
(Registrant)
Date:
April 19, 2016
By:
/s/ STACY J. SMITH
Stacy J. Smith
Executive Vice President, Chief Financial Officer, and Principal
Accounting Officer
Exhibit 99.1
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95054-1549
News Release
Intel Reports First -Quarter GAAP Revenue of $13.7 Billion;
Non-GAAP Revenue of $13.8 Billion
News Summary:
• Revenue increased year-over-year, driven by growth in an expanded portfolio of businesses
• Strength in Data Center and Internet of Things Groups' revenue, and a strong start for the Programmable Solutions Group
(formerly Altera) helped offset PC market and macro-economic challenges
• Intel announces restructuring initiative to accelerate Intel's transformation from a PC company to one that powers the cloud
and billions of smart, connected computing devices
• Intel Chief Financial Officer (CFO) Stacy Smith will transition to a new role leading sales, manufacturing and operations
once his successor is in place
SANTA CLARA, Calif., April 19, 2016 -- Intel Corporation today reported first -quarter GAAP revenue of $13.7 billion , operating
income of $2.6 billion , net income of $2.0 billion and EPS of 42 cents . Intel reported non-GAAP revenue of $13.8 billion ,
operating income of $3.3 billion , net income of $2.6 billion and EPS of 54 cents . The company generated approximately $4.0
billion in cash from operations, paid dividends of $1.2 billion , and used $793 million to repurchase 27 million shares of stock.
“Our first-quarter results tell the story of Intel’s ongoing strategic transformation, which is progressing well and will accelerate in
2016,” said Brian Krzanich, Intel CEO. “We are evolving from a PC company to one that powers the cloud and billions of smart,
connected computing devices.”
Intel also today announced a CFO succession plan. The current CFO, Smith, will transition to a new role at the company, leading
sales, manufacturing and operations once his successor is in place. The company is beginning a formal search process for a new
CFO that will assess both internal and external candidates. Smith will remain firmly focused on his CFO role and duties throughout
the search and transition process.
“We are excited to have Stacy take on this new role, leveraging the deep expertise and strong leadership skills that he has developed
over his 28-year career at Intel,” said Krzanich.
- more -
Q1 Key Business Unit Trends*
• Client Computing Group revenue of $7.5 billion , down 14 percent sequentially and up 2 percent year-over-year
• Data Center Group revenue of $4.0 billion , down 7 percent sequentially and up 9 percent year-over-year
• Internet of Things Group revenue of $651 million , up 4 percent sequentially and up 22 percent year-over-year
• Non-Volatile Memory Solutions Group revenue of $557 million , down 15 percent sequentially and down 6 percent yearover-year
• Intel Security Group revenue of $537 million , up 5 percent sequentially and up 12 percent year-over-year
• Programmable Solutions Group revenue of $359 million , which does not include $99 million of revenue as a result of
acquisition-related adjustments.
* The first quarter of 2016 had 14 weeks of business versus the typical 13 weeks, as the company realigned its fiscal year with the calendar year.
Revenue
Gross Margin
R&D and MG&A
Operating Income
Tax Rate
Net Income
Earnings Per Share
Revenue
Gross Margin
R&D and MG&A
Operating Income
Tax Rate
Net Income
Earnings Per Share
GAAP Financial Comparison
Quarterly Year-Over-Year
Q1 2016
Q1 2015
$13.7 billion
$12.8 billion
59.3%
60.5%
$5.5 billion
$4.9 billion
$2.6 billion
$2.6 billion
18.4%
25.5%
$2.0 billion
$2.0 billion
42 cents
41 cents
Non-GAAP Financial Comparison
Quarterly Year-Over-Year
Q1 2016
Q1 2015
$13.8 billion
$12.8 billion ^
62.7%
61.4%
$5.4 billion
$4.9 billion ^
$3.3 billion
$2.9 billion
18.4% ^
25.5% ^
$2.6 billion
$2.2 billion
54 cents
45 cents
^ No adjustment on a non-GAAP basis.
- more -
vs. Q1 2015
up 7%
down 1.2 points
up 11%
flat
down 7.1 points
up 3%
up 2%
vs. Q1 2015
up 8%
up 1.3 points
up 9%
up 13%
down 7.1 points
up 19%
up 20%
Revenue
Gross Margin
R&D and MG&A
Operating Income
Tax Rate
Net Income
Earnings Per Share
Revenue
Gross Margin
R&D and MG&A
Operating Income
Tax Rate
Net Income
Earnings Per Share
GAAP Financial Comparison
Quarterly Sequential
Q1 2016
Q4 2015
$13.7 billion
$14.9 billion
59.3%
64.3%
$5.5 billion
$5.2 billion
$2.6 billion
$4.3 billion
18.4%
16.0%
$2.0 billion
$3.6 billion
42 cents
74 cents
Non-GAAP Financial Comparison
Quarterly Sequential
Q1 2016
Q4 2015
$13.8 billion
$14.9 billion ^
62.7%
64.8%
$5.4 billion
$5.2 billion ^
$3.3 billion
$4.4 billion
18.4% ^
16.0% ^
$2.6 billion
$3.7 billion
54 cents
76 cents
vs. Q4 2015
down 8%
down 5.0 points
up 4%
down 40%
up 2.4 points
down 43%
down 43%
vs. Q4 2015
down 7%
down 2.1 points
up 3%
down 26%
up 2.4 points
down 29%
down 29%
Business Outlook
Intel’s Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures,
strategic investments and other significant transactions that may be completed after April 19 .
The acquisition of Altera was completed in early fiscal year 2016. As a result of the Altera acquisition, we have acquisitionrelated charges that are primarily non-cash. Our guidance for the second quarter and full-year 2016 include both GAAP and nonGAAP estimates. See reconciliations between these GAAP and non-GAAP financial measures are included below.
^ No adjustment on a non-GAAP basis.
- more -
Intel/Page 4
Q2 2016 Outlook (GAAP, unless otherwise noted):
• Revenue: $13.5 billion , plus or minus $500 million , returning to a typical 13-week quarter.
• Non-GAAP gross margin percentage: 61 percent , plus or minus a couple percentage points.
• R&D plus MG&A spending: approximately $5.1 billion .
• Restructuring charges: approximately $1.2 billion . Non-GAAP restructuring charges: zero.
• Impact of equity investments and interest and other: approximately $150 million net gain.
• Depreciation: approximately $1.5 billion
Full-Year Outlook (GAAP, unless otherwise noted):
• Revenue: up mid-single digits , down from prior outlook of mid- to high-single digits.
• Non-GAAP gross margin: 62 percent , plus or minus a couple percentage points, down from prior outlook of 63 percent, plus
or minus a couple percentage points.
• Non-GAAP R&D plus MG&A spending: approximately $20.6 billion , plus or minus $400 million , down from prior outlook
of $21.3 billion .
• Restructuring charges: approximately $1.2 billion . Non-GAAP restructuring charges: zero.
• Depreciation: approximately $6.3 billion , plus or minus $200 million , down from prior outlook of $6.5 billion , plus or
minus $200 million .
• Tax rate: approximately 22 percent , for each of the remaining quarters of the year, down from prior outlook of
approximately 25 percent .
• Full-year capital spending: $9.5 billion , plus or minus $500 million , is unchanged from prior outlook.
For additional information regarding Intel’s results and Business Outlook, please see the CFO commentary at:
www.intc.com/results.cfm .
Status of Business Outlook
Intel’s Business Outlook is posted on intc.com and may be reiterated in public or private meetings with investors and others.
The Business Outlook will be effective through the close of business on June 17 unless earlier updated; except that the Business
Outlook for amortization of acquisition-related intangibles, impact of equity investments and interest and other, restructuring
charges, and tax rate, will be effective only through the close of business on April 26 . Intel’s Quiet Period will start from the close
of business on June 17 until publication of the company’s second -quarter earnings release, scheduled for July 20 . During the Quiet
Period, all of the Business Outlook and other forward-looking statements disclosed in the company’s news releases and filings with
the SEC should be considered as historical, speaking as of prior to the Quiet Period only and not subject to an update by the
company.
- more -
Intel/Page 5
Forward-Looking Statements
The above statements and any others in this release that refer to future plans and expectations are forward-looking statements
that involve a number of risks and uncertainties. Words such as "anticipates," "expects," "intends," "goals," "plans," "believes,"
"seeks," "estimates," "continues," "may," "will," "should," and variations of such words and similar expressions are intended to
identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also
identify forward-looking statements. Many factors could affect Intel's actual results, and variances from Intel's current expectations
regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel
presently considers the following to be important factors that could cause actual results to differ materially from the company's
expectations.
•
Demand for Intel's products is highly variable and could differ from expectations due to factors including changes in business
and economic conditions; consumer confidence or income levels; the introduction, availability and market acceptance of
Intel's products, products used together with Intel products and competitors' products; competitive and pricing pressures,
including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer
order patterns including order cancellations; and changes in the level of inventory at customers.
•
Intel's gross margin percentage could vary significantly from expectations based on capacity utilization; variations in
inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels;
segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory;
changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields.
Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including
marketing expenses, and Intel's ability to respond quickly to technological developments and to introduce new products or
incorporate new features into existing products, which may result in restructuring and asset impairment charges.
Intel's results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries
where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters,
infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the
formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which
could be changed without prior notice.
•
•
Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in
the short term.
•
The amount, timing and execution of Intel's stock repurchase program could be affected by changes in Intel's priorities for
the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel's cash flows or
changes in tax laws.
•
Intel's expected tax rate is based on current tax law and current expected income and may be affected by the jurisdictions in
which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the
resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the
ability to realize deferred tax assets.
- more -
Intel/Page 6
•
Gains or losses from equity securities and interest and other could vary from expectations depending on gains or losses on the
sale, exchange, change in the fair value or impairments of debt and equity investments, interest rates, cash balances, and
changes in fair value of derivative instruments.
•
Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and
reputation.
•
Intel's results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer,
antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting
Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel's ability to
design its products, or requiring other remedies such as compulsory licensing of intellectual property.
•
Intel's results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions. We
completed our acquisition of Altera on December 28, 2015 and risks associated with that acquisition are described in the
“Forward Looking Statements” paragraph of Intel’s press release dated June 1, 2015, which risk factors are incorporated by
reference herein.
•
Intel’s results may be affected by factors that could cause the implementation of, and expected results from, the restructuring
plan announced on April 19, 2016 to differ from Intel’s expectations. A detailed description of risks associated with the
restructuring plan and factors that could cause actual results of the restructuring plan to differ is set forth in the “Forward
Looking Statements” paragraph of Intel’s press release entitled “Intel Announces Restructuring Initiative to Accelerate
Transformation” dated April 19, 2016, which risk factors are incorporated by reference herein.
A detailed discussion of these and other factors that could affect Intel's results is included in Intel's SEC filings, including the
company's most recent reports on Forms 10-K and 10-Q.
- more -
Intel/Page 7
Earnings Webcast
Intel will hold a public webcast at 2 p.m. PDT today on its Investor Relations website at www.intc.com . A webcast replay
and audio download will also be available on the site.
Intel plans to report its earnings for the second quarter of 2016 on July 20 . Immediately following the earnings report, the
company plans to publish a commentary by Stacy J. Smith, Intel CFO and executive vice president, at www.intc.com/results.cfm . A
public webcast of Intel’s earnings conference call will follow at 2 p.m. PDT at www.intc.com .
About Intel
Intel (NASDAQ: INTC) expands the boundaries of technology to make the most amazing experiences possible. Information about
Intel can be found at newsroom.intel.com and intel.com.
Intel, the Intel logo, Core, and Ultrabook are trademarks of Intel Corporation or its subsidiaries in the United States and other countries.
*Other names and brands may be claimed as the property of others.
- more -
Intel/Page 8
INTEL CORPORATION
CONSOLIDATED SUMMARY STATEMENT OF INCOME DATA
(In millions, except per share amounts)
Three Months Ended
Apr 2,
2016
NET REVENUE
$
Dec 26,
2015
13,702
$
Mar 28,
2015
14,914
$
12,781
Cost of sales
5,572
5,324
5,051
GROSS MARGIN
8,130
9,590
7,730
Research and development
3,246
3,119
2,995
Marketing, general and administrative
2,226
2,118
1,953
R&D AND MG&A
5,472
5,237
4,948
Restructuring and asset impairment charges
—
(13)
105
Amortization of acquisition-related intangibles
90
67
62
OPERATING EXPENSES
5,562
5,291
5,115
OPERATING INCOME
2,568
4,299
2,615
22
18
32
(82)
(14)
26
Gains (losses) on equity investments, net
Interest and other, net
INCOME BEFORE TAXES
Provision for taxes
2,508
4,303
462
690
2,673
681
NET INCOME
$
2,046
$
3,613
$
1,992
BASIC EARNINGS PER SHARE OF COMMON STOCK
$
0.43
$
0.77
$
0.42
DILUTED EARNINGS PER SHARE OF COMMON STOCK
$
0.42
$
0.74
$
0.41
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
BASIC
4,722
4,722
4,741
DILUTED
4,875
4,876
4,914
- more -
Intel/Page 9
INTEL CORPORATION
CONSOLIDATED SUMMARY BALANCE SHEET DATA
(In millions)
Apr 2,
2016
Dec 26,
2015
CURRENT ASSETS
$
3,061
$
15,308
2,927
2,682
Trading assets
9,103
7,323
Accounts receivable, net
4,216
4,787
628
532
Work in process
2,980
2,893
Finished goods
2,143
1,742
5,751
5,167
Inventories
Raw materials
Other current assets
2,339
3,053
TOTAL CURRENT ASSETS
27,397
38,320
32,644
31,858
6,377
5,960
Marketable equity securities
Other long-term investments
3,097
1,891
Goodwill
16,942
11,332
Identified intangible assets, net
11,140
3,933
Other long-term assets
7,870
TOTAL ASSETS
8,165
$
105,467
$
101,459
$
3,594
$
2,634
CURRENT LIABILITIES
Short-term debt
Accounts payable
3,163
2,063
Accrued compensation and benefits
1,834
3,138
820
960
Deferred income
2,632
2,188
Other accrued liabilities
5,483
4,663
TOTAL CURRENT LIABILITIES
17,526
15,646
Long-term debt
21,775
20,036
Accrued advertising
Long-term deferred tax liabilities
1,247
954
Other long-term liabilities
2,851
2,841
894
897
TEMPORARY EQUITY
Stockholders' equity
Preferred Stock
Common stock and capital in excess of par value
Accumulated other comprehensive income (loss)
Retained Earnings
TOTAL STOCKHOLDERS' EQUITY
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
- more -
$
—
—
24,088
23,411
560
60
36,526
37,614
61,174
61,085
105,467
$
101,459
Intel/Page 10
INTEL CORPORATION
SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In millions)
Q1 2016
Q4 2015
Q1 2015
CASH INVESTMENTS:
Cash and short-term investments
$
Trading assets
5,988
$
9,103
Total cash investments
17,990
$
7,323
$
15,091
$
$
1,318
$
6,108
8,010
25,313
$
920
$
14,118
CURRENT DEFERRED INCOME:
Deferred income on shipments of components to distributors
Deferred income from software, services and other
1,314
Total current deferred income
1,268
965
1,231
$
2,632
$
2,188
$
2,196
Depreciation
$
1,619
$
1,936
$
1,848
Share-based compensation
$
448
$
296
$
368
Amortization of intangibles
$
396
$
210
$
Additions to property, plant and equipment*
$
(1,259)
$
(2,328)
$
Acquisitions, net of cash acquired
$
(14,569)
$
(375)
$
(57)
Investments in non-marketable equity investments
$
(182)
$
(147)
$
(278)
$
(793)
$
(525)
$
(750)
Proceeds from sales of common stock to employees & excess tax benefit
$
356
$
190
$
363
Issuance of long-term debt, net of issuance costs
$
—
$
1,490
$
$
$
(1,133)
$
SELECTED CASH FLOW INFORMATION:
(1,228)
251
(2,025)
—
(1,137)
EARNINGS PER SHARE OF COMMON STOCK INFORMATION:
Weighted average shares of common stock outstanding - basic
4,722
4,722
4,741
Dilutive effect of employee equity incentive plans
66
64
82
Dilutive effect of convertible debt
87
90
91
4,875
4,876
4,914
Weighted average shares of common stock outstanding - diluted
STOCK BUYBACK:
Shares repurchased
27
16
21
Cumulative shares repurchased (in billions)
4.8
4.8
4.7
Remaining dollars authorized for buyback (in billions)
$
8.6
$
9.4
$
11.6
OTHER INFORMATION:
112.4
107.3
106.4
* $132 million of equipment received in Q1 2016 is excluded from capital spending. The equipment was prepaid primarily in 2013 and 2014 and was reflected as cash from
operations in the respective periods in which the cash was paid.
- more -
Intel/Page 11
INTEL CORPORATION
SUPPLEMENTAL OPERATING SEGMENT RESULTS
(In millions)
Three Months Ended
Apr 2,
2016
Dec 26,
2015
Sep 26,
2015
Twelve Months Ended
Jun 27,
2015
Mar 28,
2015
Dec 26,
2015
Dec 27,
2014
Net Revenue
Client Computing Group
Platform
$
Other
7,188
$
8,392
$
8,089
$
7,124
$
7,049
$
30,654
$
33,210
361
364
417
413
371
1,565
1,662
7,549
8,756
8,506
7,537
7,420
32,219
34,872
3,718
4,021
3,863
3,579
3,419
14,882
13,366
281
287
277
273
262
1,099
1,030
3,999
4,308
4,140
3,852
3,681
15,981
14,396
571
526
501
487
462
1,977
1,814
80
99
80
72
71
321
328
651
625
581
559
533
2,298
2,142
Non-Volatile Memory Solutions Group
557
654
655
696
592
2,597
2,146
Intel Security Group
537
512
506
488
479
1,985
2,010
Programmable Solutions Group
359
—
—
—
—
—
—
Data Center Group
Platform
Other
Internet of Things Group
Platform
Other
All other
TOTAL NET REVENUE
50
59
77
63
76
275
304
$
13,702
$
14,914
$
14,465
$
13,195
$
12,781
$
55,355
$
55,870
$
1,885
$
2,719
$
2,433
$
1,603
$
1,411
$
8,166
$
10,327
Operating income (loss)
Client Computing Group
Data Center Group
1,764
2,175
2,130
1,843
1,699
7,847
7,380
Internet of Things Group
123
132
150
146
87
515
583
Non-Volatile Memory Solutions Group
(95)
24
51
92
72
239
255
85
79
97
22
15
213
164
(200)
—
—
—
—
—
—
Intel Security Group
Programmable Solutions Group
All other
TOTAL OPERATING INCOME
(994)
$
2,568
(831)
$
4,298
(669)
$
4,192
(809)
$
2,897
(669)
$
2,615
(2,978)
$
14,002
(3,362)
$
15,347
During the first quarter of 2016, we formed the Programmable Solutions Group (PSG) as a result of our acquisition of Altera. Additionally, we formed the New Technology Group, which includes
products designed for wearables, cameras, and other market segments (including drones). All prior-period amounts have been retrospectively adjusted to reflect the way we internally manage
and monitor segment performance starting in fiscal year 2016 and includes other minor reorganizations.
Revenue for our reportable and non-reportable operating segments is primarily related to the following product lines:
•
•
•
•
•
•
Client
Computing
Group
. Includes platforms designed for notebooks (including Ultrabook™ devices), 2 in 1 systems, desktops (including all-in-ones and high-end enthusiast PCs), tablets,
phones, wireless and wired connectivity products, and mobile communication components.
Data
Center
Group.
Includes platforms designed for the enterprise, cloud, communications infrastructure, and technical computing segments.
Internet
of
Things
Group.
Includes platforms designed for Internet of Things market segments, including retail, transportation, industrial, and buildings and home use, along with a broad
range of other market segments.
Non-Volatile
Memory
Solutions
Group.
Includes NAND flash memory products primarily used in solid-state drives.
Intel
Security
Group.
Includes security software products designed to deliver innovative solutions that secure computers, mobile devices, and networks around the world from the latest
malware and emerging online threats.
Programmable
Solutions
Group.
Includes programmable semiconductors (primary field-programmable gate array) and related products for a broad range of market segments, including
communications, networking and storage, industrial, military, and automotive.
We have sales and marketing, manufacturing, engineering, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments, and the expenses
are included in the following operating results.
The “all other” category includes revenue, expenses, and charges such as:
•
results of operations from our New Technology Group;
•
amounts included within restructuring and asset impairment charges;
•
a portion of profit-dependent compensation and other expenses not allocated to the operating segments;
•
divested businesses for which discrete operating results are not regularly reviewed by our CODM;
•
results of operations of start-up businesses that support our initiatives, including our foundry business; and
•
acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.
A substantial majority of our revenue is generated from the sale of platforms. Platforms incorporate various components and technologies, including a microprocessor and chipset, a standalone SoC, or a multi-chip package. Our remaining primary product lines are incorporated in "other."
Intel/Page 12
INTEL CORPORATION
SUPPLEMENTAL PLATFORM REVENUE INFORMATION
Q1 2016
Q1 2016
compared to Q4 2015
compared to Q1 2015
(17)%
(15)%
2%
19%
Client Computing Group Platform
Unit Volumes
Average Selling Prices
Data Center Group Platform
Unit Volumes
(1)%
13%
Average Selling Prices
(7)%
(3)%
Client Computing Group Notebook, Desktop and Tablet Platform Key Drivers
Q1 2016 compared to Q1 2015 :
- Notebook platform volumes decreased 2%
- Notebook platform average selling prices were flat
- Desktop platform volumes decreased 4%
- Desktop platform average selling prices increased 6%
- Tablet platform volumes of 4 million units decreased 44%
- more -
Intel/Page 13
INTEL CORPORATION
EXPLANATION OF NON-GAAP MEASURES
In addition to disclosing financial results in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release contains references to the non-GAAP
financial measures described below. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of
our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with
respect to key metrics used by management in operating our business.
Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects. Income tax effects have been calculated using our
GAAP effective tax rate. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP,
and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
Acquisition-related adjustments: The non-GAAP financial measures disclosed by the company exclude certain business combination accounting adjustments and certain
expenses related to acquisitions as follows:
•
Revenue and gross margin non-GAAP outlook excludes the impact of the deferred revenue write-down, amortization of acquisition-related intangible assets that
impact cost of sales, and the inventory valuation adjustment.
◦
Deferred
revenue
write-down
: Sales to distributors are made under agreements allowing for subsequent price adjustments and returns and are deferred until
the products are resold by the distributor. Business combination accounting principles require us to write down to fair value the deferred revenue assumed in
our acquisitions as we have limited performance obligations associated with this deferred revenue. Our GAAP revenues and related cost of sales for the
subsequent reselling by distributors to end customers after an acquisition do not reflect the full amounts that would have been reported if the acquired
deferred revenue was not written down to fair value. The non-GAAP adjustments eliminate the effect of the deferred revenue write-down. We believe these
adjustments are useful to investors as an additional means to reflect revenue and gross margin trends of our business.
◦
Inventory
valuation
adjustment
: Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of
inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustment to our cost of sales
excludes the expected profit margin component that is recorded under business combination accounting principles. We believe the adjustment is useful to
investors as an additional means to reflect cost of sales and gross margin trends of our business.
•
Amortization
of
acquisition-related
intangible
assets
: Amortization of acquisition-related intangible assets consists of amortization of intangibles assets such as
developed technology, trade names, and customer relationships acquired in connection with business combinations. We record charges relating to the amortization of
these intangibles within both cost of sales and operating expenses in our GAAP financial statements. Amortization charges for our acquisition-related intangible assets
are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. Consequently, our non-GAAP adjustments exclude these charges
to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
•
Restructuring
and
asset
impairment
charges
: Restructuring and asset impairment charges are costs associated with a formal restructuring plan and are primarily
related to employee severance and benefit arrangements, assets impairments and other restructuring charges. We exclude restructuring costs, including any adjustments
to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures. We believe that these costs do not reflect our current operating
performance or enable effective comparisons to our past operating performance.
•
R&D plus MG&A spending non-GAAP outlook excludes the impact of other charges associated with the acquisition of Altera, which primarily includes bankers fees,
compensation-related costs, and valuation charges for Altera's stock based compensation.
Constant currency effect on revenue: Constant currency results assume foreign revenues are translated from foreign currencies to the U.S. dollar, net of the effect of foreign
currency hedges, at rates consistent with those in the comparable period. We believe this is a useful metric that facilitates comparison to our historical performance for the Intel
Security Group operating segment.
Gross cash, net cash and other longer term investments: We reference non-GAAP financial measures of gross cash, net cash and other longer term investments, which are used
by management when assessing our sources of liquidity and capital resources. We believe these non-GAAP financial measures are helpful to investors in understanding our
capital structure and how we manage our resources.
- more -
Intel/Page 14
SUPPLEMENTAL RECONCILIATIONS OF GAAP OUTLOOK TO NON-GAAP OUTLOOK
Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial
measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with
GAAP, and the financial outlook prepared in accordance with GAAP and the reconciliations from this Business Outlook should be carefully evaluated. Please refer
to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustment made to the comparable GAAP measures, the ways
management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.
($ in Billions)
Q2 2016 Outlook
GAAP GROSS MARGIN PERCENTAGE
2016 Outlook
58% +/- a couple pct. pts.
—%
—%
Inventory valuation
1%
1%
2%
2%
Adjustments for:
Deferred revenue write-down
NON-GAAP GROSS MARGIN PERCENTAGE
GAAP R&D plus MG&A SPENDING
$
Adjustment for other acquisition-related charges
approximately
$
—
NON-GAAP R&D plus MG&A SPENDING
$
GAAP RESTRUCTURING CHARGES
$
Adjustment for restructuring charges
NON-GAAP RESTRUCTURING CHARGES
5.1
approximately
(0.1)
5.1
approximately
$
1.2
approximately
$
(1.2)
$
20.7
—
- more -
20.6
approximately
1.2
approximately
(1.2)
$
—
Intel/Page 15
SUPPLEMENTAL RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS
GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this
document for a detailed explanation of the adjustment made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the
reasons why management believes the non-GAAP measures provide useful information for investors.
Three Months Ended
($ in Millions, except per share amounts)
GAAP NET REVENUE
NON-GAAP NET REVENUE
GAAP GROSS MARGIN
Deferred revenue write-down, net of cost of sales
Inventory valuation
NON-GAAP GROSS MARGIN
Apr 2,
2016
Dec 26,
2015
13,702
Mar 28,
2015
14,914
12,781
99
—
—
13,801
14,914
12,781
8,130
9,590
7,730
64
—
—
226
—
—
235
72
120
8,655
9,662
7,850
59.3%
64.3%
60.5%
0.1%
—%
—%
Inventory valuation
1.6%
—%
—%
1.7%
0.5%
0.9%
62.7%
64.8%
61.4%
Other acquisition related charges
5,472
(100)
5,237
4,948
—
—
5,372
5,237
4,948
GAAP OPERATING INCOME
2,568
4,299
2,615
64
—
—
Inventory valuation
226
—
—
Amortization of acquisition related intangibles
325
139
182
—
(13)
105
100
—
—
NON-GAAP OPERATING INCOME
3,283
4,425
2,902
GAAP NET INCOME
2,046
3,613
1,992
64
—
—
Inventory valuation
226
—
—
325
139
182
—
(13)
105
100
—
—
Income tax effect
(132)
(20)
(73)
2,629
3,719
2,206
GAAP DILUTED EARNINGS PER COMMON SHARE
0.42
0.74
0.41
Deferred revenue write down, net of cost of sales
0.01
—
—
Inventory valuation
0.05
—
—
0.07
0.03
0.04
—
—
0.02
0.02
—
—
NON-GAAP NET INCOME
Income tax effect
NON-GAAP DILUTED EARNINGS PER COMMON SHARE
- more -
(0.03)
(0.01)
(0.02)
0.54
0.76
0.45
Intel/Page 16
SUPPLEMENTAL RECONCILIATIONS OF CONSTANT CURRENCY
Set forth below is a reconciliation of our operating results for the Intel Security Group operating segment on a constant currency basis. This non-GAAP financial
measure should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in
accordance with GAAP and reconciliations from these results should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this
Intel Security Group Operating Segment
Three Months Ended
Apr 2,
2016
($ in Millions)
GAAP Net Revenue
Mar 28,
2015
537
Constant currency adjustment
% Change
479
12%
479
15%
14
Non-GAAP Net Revenue, constant currency adjusted
$
GAAP Operating Income
551
$
85
15
n/m
15
n/m
3
Non-GAAP Operating Income, constant currency adjusted
$
- more -
88
$
Intel/Page 17
SUPPLEMENTAL RECONCILIATIONS OF GAAP CASH AND CASH EQUIVALENTS TO NON-GAAP GROSS CASH AND NON-GAAP NET
CASH RESULTS
Set forth below are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The non-GAAP financial
measures disclosed by the company have limitations and should not be considered a substitute for, or superior to, financial measures prepared in accordance with
GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. Please refer to
"Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustments made to comparable GAAP measures, the ways management
uses these non-GAAP measures, and the reasons why management believes these non-GAAP measures provide useful information for investors.
Apr 2,
2016
($ in Millions)
GAAP CASH AND CASH EQUIVALENTS
$
Dec 26,
2015
3,061
$
2,927
Trading assets
15,308
2,682
9,103
7,323
$
15,091
$
25,313
GAAP OTHER LONG-TERM INVESTMENTS
$
3,097
$
1,891
Loans receivable and other
1,466
Reverse repurchase agreements with original maturities greater than approximately three months
1,170
350
1,000
NON-GAAP OTHER LONGER TERM INVESTMENTS
$
4,913
$
4,061
NON-GAAP GROSS CASH
$
20,004
$
29,374
Apr 2,
2016
($ in Millions)
GAAP CASH AND CASH EQUIVALENTS
$
3,061
$
2,927
Trading assets
Dec 26,
2015
2,682
9,103
$
Short-term debt
15,091
7,323
$
(3,594)
Unsettled trade liabilities and other
Long-term debt
15,308
25,313
(2,634)
(52)
(99)
(21,775)
(20,036)
NON-GAAP NET CASH (excluding other longer term investments)
$
(10,330)
$
2,544
GAAP OTHER LONG-TERM INVESTMENTS
$
3,097
$
1,891
Loans receivable and other
Reverse repurchase agreements with original maturities greater than approximately three months
1,466
1,170
350
1,000
NON-GAAP OTHER LONGER TERM INVESTMENTS
$
4,913
$
4,061
NON-GAAP NET CASH (including other longer term investments)
$
(5,417)
$
6,605
Exhibit 99.2
Intel Corporation
CFO Commentary on First -Quarter Results
Note:
The
presentation
of
our
financial
results
has
been
retrospectively
adjusted
to
reflect
the
change
in
our
operating
segment
structure.
Summary
The first quarter, inclusive of an extra workweek, resulted in year-on-year growth and was in the low end of the range of our prior
Outlook. We are seeing growth in Data Center, Internet of Things, Security, and Programmable Solutions (formally Altera) groups,
which all helped offset a weak PC market.
On a GAAP basis, first quarter revenue of $13.7B was up 7% on year-on-year basis. Gross margin of 59.3% was up 1.3 points from
expectations. Operating income for the first quarter was $2.6B , down 2% on a year-on-year basis. The tax rate for the quarter was
18.4% . Net income for the first quarter was $2.0B , up 3% on a year-on-year basis. Earnings per share was $0.42 , up one cent on a
year-on-year basis. During the quarter, we purchased $1.3B in capital assets, paid $1.2B in dividends, and repurchased $0.8B of
stock. Total debt was $25.4B consistent with our prior commentary on the financing plan for the Altera acquisition.
Non-GAAP^ revenue for the first quarter was $13.8B , up 8% on a year-on-year basis. Client Computing Group revenue was up 2%
on a year-on-year basis. Data Center Group revenue was up 9% on a year-on-year basis. Non-GAAP gross margin was 62.7% , up
0.7 points from expectations. Non-GAAP operating income for the first quarter was $3.3B , up 13% on a year-on-year basis. NonGAAP net income for the first quarter was $2.6B , up 19% on a year-on-year basis. Non-GAAP earnings per share was $0.54 , up
nine cents on a year-on-year basis.
As we look forward to the second quarter of 2016 , we are forecasting the midpoint of the revenue range at $13.5B . This forecast is
at the low end of the average seasonal increase for the second quarter after adjusting for the extra workweek in the first quarter. We
are forecasting the midpoint of the non-GAAP gross margin range for the second quarter to be 61%. Spending for the second quarter
is expected to be $5.1B . Restructuring charges are expected to be $1.2B on a GAAP basis.
Turning to the full year 2016 , we are forecasting revenue to grow in the mid-single digits from 2015 , down from the expectation of
growing in the mid to high single digits. We are forecasting the midpoint of the non-GAAP gross margin range to be 62%, down 1
point from previous expectations. Non-GAAP spending for R&D and MG&A for the year is expected to be $20.6B plus or minus
$400M , down $700M from the expectation of $21.3B.
^ See the explanation of non-GAAP measures and the reconciliation to the most directly comparable GAAP financial measures on page 9-10.
The first quarter 2016 results when compared to the first quarter from a year ago were the following:
• Non-GAAP revenue of $13.8B , up $1.0B ( 8% ) from $12.8B .
• Non-GAAP gross margin of 62.7% , up 1.3 points from 61.4% .
• Non-GAAP operating income of $3.3B , up $0.4B ( 13% ) from $2.9B .
• Non-GAAP net income of $2.6B , up $0.4B ( 19% ) from $2.2B .
• Non-GAAP earnings per share of $0.54 was up 9 cents ( 20% ) from $0.45 .
This document presents results and comparisons on a GAAP basis unless otherwise stated.
First Quarter 2016
Revenue
Non-GAAP revenue of $13.8B was down 7% sequentially and up 8% on a year-on-year basis. Total platform* volumes were down
15% when compared to the fourth quarter. Total platform* average selling prices were up 3% over this same time period.
Year-on-Year
Comparisons
:
• Client Computing Group had revenue of $7.5B , up 2% with platform volumes down 15% and platform average selling
prices up 19% . Desktop platform volumes were down 4% and desktop platform average selling prices were up 6% .
Notebook platform volumes were down 2% and notebook platform average selling prices were flat. Tablet volumes were
down 44% and average selling prices were up significantly.
• Data Center Group had revenue of $4.0B , up 9% with platform volumes up 13% and platform average selling prices were
down 3% as result of strong unit growth in networking and storage.
• Internet of Things Group had revenue of $651M , up 22% .
• Non-Volatile Memory Solutions Group had revenue of $557M , down 6% .
• Intel Security Group had revenue of $537M , up 12% on a GAAP basis and up 15% on a constant currency basis.
• Programmable Solutions Group had revenue of $359M . When adjusting for $99M of deferred revenue, this business
achieved mid-single digit growth.
Quarter-on-Quarter
Comparisons
:
• Client Computing Group revenue was down 14% with platform volumes down 17% and platform average selling prices up
2% .
• Data Center Group revenue was down 7% with platform volumes down 1% and platform average selling prices down 7% .
• Internet of Things Group revenue was up 4% .
• Non-Volatile Memory Solutions Group revenue was down 15% .
• Intel Security Group revenue was up 5% .
Gross Margin
On a non-GAAP basis, gross margin of 62.7% was down 2.1 points compared to the fourth quarter, and up 0.7 points to the midpoint
of expectations.
*Client Computing Group, Data Center Group, and Internet of Things Group microprocessors and chipsets.
Page 3
Gross Margin Reconciliation: GAAP Q4'15 to Q1'16 Non-GAAP ( 64.3% to 62.7% , down 1.6 points )
Gross Margin Reconciliation [note: point attributions are approximate]:
64.3 %
-1.5 points:
-1.5 points:
-1.5 point:
-1.0 point:
-1.0 point:
-0.5 point:
+1.5 points:
+1.0 point:
59.3 %
+1.5 point:
+1.5 point:
62.7 %
Q4’15 GAAP Gross Margin
Altera acquisition related adjustments
Lower platform* volume
Higher factory startup costs (primarily on 10nm)
Miscellaneous
Higher write-offs (primarily on platform* products)
Lower platform* unit cost (primarily on 14nm products)
Higher platform* average selling prices
Q1’16 GAAP Gross Margin
Altera acquisition-related adjustments
Q1'16 Non-GAAP Gross Margin
Gross Margin Reconciliation: Q1'16 Non-GAAP Outlook to Q1'16 Non-GAAP ( 62% +/- couple points to 62.7% , up 0.7 points)
62.0 %
+1.0 point:
+1.0 point:
-1.0 point:
62.7 %
Q1’16 Non-GAAP Gross Margin Outlook
Lower platform* unit cost (primarily on 14nm products)
Higher platform* average selling prices
Lower platform* volume
Q1'16 Non-GAAP Gross Margin
p
Gross Margin Reconciliation: Q1'15 to Q1'16 ( 60.5% to 59.3% , down 1.2 points )
When comparing the first quarter on a year-on-year basis, gross margin was down 1.2 points , primarily driven by Altera and other
acquisition related charges, higher platform* unit costs (primarily on of 14nm products), lower platform* volume, and Non-Volatile
Memory Solutions Group (NSG). This was partially offset by higher platform* average selling prices.
Non-GAAP Gross Margin Reconciliation: Non-GAAP Q1'15 to Non-GAAP Q1'16 ( 61.4% to 62.7 , up 1.3 points)
On a non-GAAP basis, when comparing the first quarter year-on-year, gross margin was up 1.3 points primarily due to higher
platform* average selling prices. This was partially offset by higher platform* unit costs (primarily on of 14nm products), lower
platform* volume, and Non-Volatile Memory Solutions Group (NSG).
Spending
Spending in the first quarter for R&D and MG&A was $5.5B. On a non-GAAP basis, spending was $5.4B, up $100M from the
fourth quarter. This is down $100M from expectations. This was primarily driven by lower R&D spending.
Depreciation was $1.6B , lower than the expectation of $1.7B.
Page 4
Amortization of acquisition-related intangibles included in operating expense was $90M , in line with expectations and all of which
is excluded on a non-GAAP basis.
Other Income Statement Items
Gains and losses on equity investments and interest and other income was a $60M net loss compared to a $4M net gain in the fourth
quarter and below the expectation of approximately zero .
The effective tax rate for the first quarter was 18.4% , down 6.6 points from expectations. This is primarily driven by a one time tax
gain from a divestiture and higher proportion of income in lower tax jurisdictions.
Balance Sheet and Cash Flow Items
On the balance sheet, total cash investments^^ ended the quarter at $15.1B , down $10.2B from the fourth quarter. $14.0B of the
total $15.1B total cash investments^^ is held by non-U.S. subsidiaries. Cash flow from operations in the first quarter was $4.0B .
During the first quarter, we paid $1.2B in dividends, purchased $1.3B in capital assets and repurchased $0.8B in stock. Total
inventories were up $584M primarily driven by our acquisition of Altera. Total debt is $25.4B, consistent with our prior commentary
on the financing plan for the Altera acquisition.
Other Items
The total number of employees was up from the fourth quarter at 112K as we completed the Altera acquisition.
Diluted shares outstanding decreased by 1M from the fourth quarter and decreased by 39M shares driven primarily by stock
repurchases on a year-on-year basis.
^^ Cash and cash equivalents, short-term investments, and trading assets
Page 5
Outlook
Intel's Business Outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic
investments and other significant transactions that may be completed after April 19 . The midpoint of the forecast ranges will be
referred to when making comparisons to specific periods.
Q2 2016 Outlook
Revenue
Revenue is expected to be $13.5B , plus or minus $500M in the second quarter. After adjusting for the extra workweek in the first
quarter, this forecast is at the low end of the average seasonal increase for the second quarter.
Non-GAAP Gross Margin
Non-GAAP gross margin in the second quarter is expected to be 61 %, plus or minus a couple of points, down 1.7 points from the
first quarter.
62.7 %
-1.0 point:
-0.5 point:
-0.5 point:
-0.5 point:
1.0 point:
61.0 %
Q1’16 Non-GAAP Gross Margin
Lower platform* volume (primarily on notebook and desktop units)
Non-Volatile Memory Solutions Group (NSG)
Higher platform* unit costs (primarily on 14nm server products)
Higher factory start-up costs on 10nm
Lower platform* write-offs
Q2’16 Non-GAAP Gross Margin
Spending
Spending for R&D and MG&A in the second quarter is expected to be approximately $5.1B . On a non-GAAP basis, this is down
$300M compared to non-GAAP spending of $5.4B in the first quarter.
Depreciation is forecast to be approximately $1.5B , down from the first quarter.
Restructuring charges are expected to be approximately $1.2B on a GAAP basis, all of which is excluded on a non-GAAP basis.
Gains and losses from equity investments and interest and other income are expected to be a net gain of approximately $150M ,
compared to a net loss of $60M in the first quarter.
Page 6
2016 Outlook
The Outlook for full year 2016 does not include the potential impact of any business combinations, asset acquisitions, divestitures,
strategic investments and other significant transactions that may be completed after April 19 . The midpoint of the forecast ranges
will be referred to when making comparisons to specific periods.
Revenue
Revenue for the year is expected to grow in the mid-single digits from 2015 , down from our previous expectation of growing in the
mid to high single digits.
Non-GAAP Gross Margin
Non-GAAP gross margin for the year is expected to be 62% , plus or minus a couple points, down 1 point from the previous nonGAAP expectation of 63% . The decrease is a result of lower platform* volume.
Non-GAAP Spending
The company is going through a significant restructuring over the next several months. When completed by mid-2017, these actions
will result in a 12K person workforce reduction and a $1.4B reduction to run rate spending. Over half of the total workforce
reduction is expected to be realized by the end of this year, driving approximately $750M in savings. Non-GAAP spending is
expected to be down by $700M from previous expectations to $20.6 billion dollars. In the second quarter of this year, we expect to
recognize a $1.2B restructuring charge on a GAAP basis as an estimate for the related actions.
Non-GAAP spending for R&D and MG&A for the year is expected to be $20.6B plus or minus $400M , down $700M from the
previous expectation of $21.3B plus or minus $400M .
Depreciation is forecast to be $6.3B plus or minus $200M , down to the previous expectation of $6.5B plus or minus $200M.
Restructuring charges are expected to be $1.2B on a GAAP basis, all of which is excluded on a non-GAAP basis.
The tax rate for each of the remaining quarters is expected to be 22% , down from the previous expectation of 25% .
Balance Sheet and Cash Flow Items
Capital spending for 2016 is expected to be $9.5B plus or minus $500M , flat to previous expectations.
Page 7
The above statements and any others in this document that refer to future plans and expectations are forward-looking
statements that involve a number of risks and uncertainties. Words such as "anticipates," "expects," "intends," "goals," "plans,"
"believes," "seeks," "estimates," "continues," "may," "will," "should," and variations of such words and similar expressions are
intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or
assumptions also identify forward-looking statements. Many factors could affect Intel's actual results, and variances from Intel's
current expectations regarding such factors could cause actual results to differ materially from those expressed in these forwardlooking statements. Intel presently considers the following to be important factors that could cause actual results to differ materially
from the company's expectations.
•
Demand for Intel's products is highly variable and could differ from expectations due to factors including changes in business
and economic conditions; consumer confidence or income levels; the introduction, availability and market acceptance of
Intel's products, products used together with Intel products and competitors' products; competitive and pricing pressures,
including actions taken by competitors; supply constraints and other disruptions affecting customers; changes in customer
order patterns including order cancellations; and changes in the level of inventory at customers.
•
Intel's gross margin percentage could vary significantly from expectations based on capacity utilization; variations in
inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels;
segment product mix; the timing and execution of the manufacturing ramp and associated costs; excess or obsolete inventory;
changes in unit costs; defects or disruptions in the supply of materials or resources; and product manufacturing quality/yields.
Variations in gross margin may also be caused by the timing of Intel product introductions and related expenses, including
marketing expenses, and Intel's ability to respond quickly to technological developments and to introduce new products or
incorporate new features into existing products, which may result in restructuring and asset impairment charges.
Intel's results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries
where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters,
infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Results may also be affected by the
formal or informal imposition by countries of new or revised export and/or import and doing-business regulations, which
could be changed without prior notice.
•
•
Intel operates in highly competitive industries and its operations have high costs that are either fixed or difficult to reduce in
the short term.
•
The amount, timing and execution of Intel's stock repurchase program could be affected by changes in Intel's priorities for
the use of cash, such as operational spending, capital spending, acquisitions, and as a result of changes to Intel's cash flows or
changes in tax laws.
Page 8
•
Intel's expected tax rate is based on current tax law and current expected income and may be affected by the jurisdictions in
which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the
resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the
ability to realize deferred tax assets.
•
Gains or losses from equity securities and interest and other could vary from expectations depending on gains or losses on the
sale, exchange, change in the fair value or impairments of debt and equity investments, interest rates, cash balances, and
changes in fair value of derivative instruments.
•
Product defects or errata (deviations from published specifications) may adversely impact our expenses, revenues and
reputation.
•
Intel's results could be affected by litigation or regulatory matters involving intellectual property, stockholder, consumer,
antitrust, disclosure and other issues. An unfavorable ruling could include monetary damages or an injunction prohibiting
Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel's ability to
design its products, or requiring other remedies such as compulsory licensing of intellectual property.
•
Intel's results may be affected by the timing of closing of acquisitions, divestitures and other significant transactions. We
completed our acquisition of Altera on December 28, 2015 and risks associated with that acquisition are described in the
“Forward Looking Statements” paragraph of Intel’s press release dated June 1, 2015, which risk factors are incorporated by
reference herein.
•
Intel’s results may be affected by factors that could cause the implementation of, and expected results from, the restructuring
plan announced on April 19, 2016 to differ from Intel’s expectations. A detailed description of risks associated with the
restructuring plan and factors that could cause actual results of the restructuring plan to differ is set forth in the “Forward
Looking Statements” paragraph of Intel’s press release entitled “Intel Announces Restructuring Initiative to Accelerate
Transformation” dated April 19, 2016, which risk factors are incorporated by reference herein.
A detailed discussion of these and other factors that could affect Intel's results is included in Intel's SEC filings, including the
company's most recent reports on Forms 10-K and 10-Q.
Page 9
INTEL CORPORATION
EXPLANATION OF NON-GAAP MEASURES
In addition to disclosing financial results in accordance with U.S. generally accepted accounting principles (GAAP), this document contains references to the non-GAAP
financial measures described below. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of
our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with
respect to key metrics used by management in operating our business.
Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects. Income tax effects have been calculated using our
GAAP effective tax rate. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP,
and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
Acquisition-related adjustments: The non-GAAP financial measures disclosed by the company exclude certain business combination accounting adjustments and certain
expenses related to acquisitions as follows:
•
Revenue and gross margin non-GAAP outlook excludes the impact of the deferred revenue write-down, amortization of acquisition-related intangible assets that
impact cost of sales, and the inventory valuation adjustment.
◦
Deferred
revenue
write-down
: Sales to distributors are made under agreements allowing for subsequent price adjustments and returns and are deferred until
the products are resold by the distributor. Business combination accounting principles require us to write down to fair value the deferred revenue assumed in
our acquisitions as we have limited performance obligations associated with this deferred revenue. Our GAAP revenues and related cost of sales for the
subsequent reselling by distributors to end customers after an acquisition do not reflect the full amounts that would have been reported if the acquired
deferred revenue was not written down to fair value. The non-GAAP adjustments eliminate the effect of the deferred revenue write-down. We believe these
adjustments are useful to investors as an additional means to reflect revenue and gross margin trends of our business.
◦
Inventory
valuation
adjustment
: Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of
inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustment to our cost of sales
excludes the expected profit margin component that is recorded under business combination accounting principles. We believe the adjustment is useful to
investors as an additional means to reflect cost of sales and gross margin trends of our business.
•
Amortization
of
acquisition-related
intangible
assets
: Amortization of acquisition-related intangible assets consists of amortization of intangibles assets such as
developed technology, trade names, and customer relationships acquired in connection with business combinations. We record charges relating to the amortization of
these intangibles within both cost of sales and operating expenses in our GAAP financial statements. Amortization charges for our acquisition-related intangible assets
are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. Consequently, our non-GAAP adjustments exclude these charges
to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
•
Restructuring
and
asset
impairment
charges
: Restructuring and asset impairment charges are costs associated with a formal restructuring plan and are primarily
related to employee severance and benefit arrangements, assets impairments and other restructuring charges. We exclude restructuring costs, including any adjustments
to charges recorded in prior periods, for purposes of calculating certain non-GAAP measures. We believe that these costs do not reflect our current operating
performance or enable effective comparisons to our past operating performance.
•
R&D plus MG&A spending non-GAAP outlook excludes the impact of other charges associated with the acquisition of Altera, which primarily includes bankers fees,
compensation-related costs, and valuation charges for Altera's stock based compensation.
Constant currency effect on revenue: Constant currency results assume foreign revenues are translated from foreign currencies to the U.S. dollar, net of the effect of foreign
currency hedges, at rates consistent with those in the comparable period. We believe this is a useful metric that facilitates comparison to our historical performance for the Intel
Security Group operating segment.
Page 10
SUPPLEMENTAL RECONCILIATIONS OF GAAP ACTUALS TO NON-GAAP ACTUALS
GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this
Three Months Ended
($ in Millions, except per share amounts)
GAAP NET REVENUE
NON-GAAP NET REVENUE
GAAP GROSS MARGIN
Inventory valuation
NON-GAAP GROSS MARGIN
Apr 2,
2016
Dec 26,
2015
13,702
Mar 28,
2015
14,914
12,781
99
—
—
13,801
14,914
12,781
8,130
9,590
7,730
64
—
—
226
—
—
235
72
120
8,655
9,662
7,850
59.3%
64.3%
60.5%
0.1%
—%
—%
Inventory valuation
1.6%
—%
—%
1.7%
0.5%
0.9%
62.7%
64.8%
61.4%
5,472
4,948
—
—
5,372
5,237
4,948
GAAP OPERATING INCOME
2,568
4,299
2,615
(100)
5,237
64
—
—
Inventory valuation
226
—
—
325
139
182
—
(13)
105
100
—
—
NON-GAAP OPERATING INCOME
3,283
4,425
2,902
GAAP NET INCOME
2,046
3,613
1,992
—
64
—
Inventory valuation
226
—
—
325
139
182
105
Income tax effect
—
(13)
100
—
—
(132)
(20)
(73)
2,629
3,719
2,206
GAAP DILUTED EARNINGS PER COMMON SHARE
0.42
0.74
0.41
Deferred revenue write down, net of cost of sales
0.01
—
—
Inventory valuation
0.05
—
—
0.07
0.03
0.04
—
—
0.02
0.02
—
NON-GAAP NET INCOME
Income tax effect
NON-GAAP DILUTED EARNINGS PER COMMON SHARE
—
(0.03)
(0.01)
(0.02)
0.54
0.76
0.45
Page 11
SUPPLEMENTAL RECONCILIATIONS OF GAAP OUTLOOK TO NON-GAAP OUTLOOK
GAAP, and the financial outlook prepared in accordance with GAAP and the reconciliations from this Business Outlook should be carefully evaluated. Please refer
to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustment made to the comparable GAAP measures, the ways
management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.
($ in Billions)
Q2 2016 Outlook
2016 Outlook
Adjustments for:
—%
—%
Inventory valuation
1%
1%
2%
2%
$
5.1
$
GAAP RESTRUCTURING CHARGES
$
Adjustment for other acquisition-related charges
approximately
$
20.7
5.1
approximately
$
20.6
approximately
1.2
approximately
$
1.2
approximately
—
Adjustment for restructuring charges
NON-GAAP RESTRUCTURING CHARGES
(0.1)
(1.2)
$
—
approximately
(1.2)
$
—
Page 12
SUPPLEMENTAL RECONCILIATIONS OF CONSTANT CURRENCY
Set forth below is a reconciliation of our operating results for the Intel Security Group operating segment on a constant currency basis. This non-GAAP financial
measure should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in
accordance with GAAP and reconciliations from these results should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this
Intel Security Group Operating Segment
Three Months Ended
Apr 2,
2016
($ in Millions)
GAAP Net Revenue
537
Non-GAAP Net Revenue, constant currency adjusted
% Change
479
12%
479
15%
14
$
GAAP Operating Income
551
$
85
Non-GAAP Operating Income, constant currency adjusted
Mar 28,
2015
15
n/m
15
n/m
3
$
88
$
Exhibit 99.3
Intel Corporation
News Release
Intel Announces Restructuring Initiative to Accelerate Transformation
SANTA CLARA, Calif., April 19, 2016 - Intel Corporation today announced a restructuring initiative to accelerate its evolution
from a PC company to one that powers the cloud and billions of smart, connected computing devices. Intel will intensify its focus in
high-growth areas where it is positioned for long-term leadership, customer value and growth, while making the company more
efficient and profitable.
The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field programmable
gate arrays (FPGAs) accelerating these opportunities - fueling a virtuous cycle of growth for the company. These growth businesses
delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which
largely offset the decline in the PC market segment.
The restructuring initiative was outlined in an e-mail from Intel CEO Brian Krzanich to Intel employees.
“Our results over the last year demonstrate a strategy that is working and a solid foundation for growth,” said Krzanich. “The
opportunity now is to accelerate this momentum and build on our strengths.
“These actions drive long-term change to further establish Intel as the leader for the smart, connected world,” he added. “I am
confident that we’ll emerge as a more productive company with broader reach and sharper execution.”
While making the company more efficient, Intel plans to increase investments in the products and technologies that that will fuel
revenue growth, and drive more profitable mobile and PC businesses. Through this comprehensive initiative, the company plans to
increase investments in its data center, IoT, memory and connectivity businesses, as well as growing client segments such as 2-in-1s,
gaming and home gateways.
These changes will result in the reduction of up to 12,000 positions globally -- approximately 11 percent of employees -- by mid2017 through site consolidations worldwide, a combination of voluntary and involuntary departures, and a re-evaluation of
programs. The majority of these actions will be communicated to affected employees over the next 60 days with some actions
spanning in to 2017.
Intel expects the program to deliver $750 million in savings this year and annual run rate savings of $1.4 billion by mid-2017. The
company will record a one-time charge of approximately $1.2 billion in the second quarter.
- more -
Intel/Page 2
Webcast
Intel also announced first-quarter 2016 earnings today. The company will discuss the restructuring initiative during the
earnings webcast scheduled today at 2:00 pm PDT on its Investor Relations website at www.intc.com . A webcast replay and audio
download will also be available on the site.
About Intel
Intel (NASDAQ: INTC) expands the boundaries of technology to make the most amazing experiences possible. Information
about Intel can be found at newsroom.intel.com and intel.com .
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995,
which are identified by words such as “plans,” “expects,” “may,” “believes,” “estimates” or “estimated, “intends,” and other similar
words, expressions, and formulations. This release contains forward-looking statements regarding the timing and scope of the
restructuring plan; the size of the restructuring plan and the amount and timing of the related charges; the expected cost savings
resulting from the restructuring plan; and demand and growth prospects for Intel’s products. Many factors could affect the actual
results of the restructuring plan, and variances from Intel's current expectations regarding such factors could cause actual results of
the restructuring plan to differ materially from those expressed in these forward-looking statements. Intel presently considers the
following to be a non-exclusive list of important factors that could cause actual results to differ materially from its expectations: the
timing and execution of plans and programs that may be subject to local labor law requirements, including consultation with
appropriate works councils; assumptions related to severance, post-retirement costs, and relocation costs; future acquisitions,
dispositions, or investments; new business initiatives and changes in product roadmap, development, and manufacturing;
assumptions related to cost savings, product demand and/or operating efficiencies. A detailed discussion of these and other risks and
uncertainties that could cause Intel’s actual results to differ materially from these forward-looking statements is included in the
documents that Intel files with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K. These forward-looking
statements speak only as of the date of this Report, and Intel does not undertake any obligation to revise or update such statements,
whether as a result of new information, future events, or otherwise.
Intel, the Intel logo, are trademarks of Intel Corporation in the United States and other countries.
*Other names and brands may be claimed as the property of others.
CROSS-REFERENCE LISTS
ANNEX I
MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE REGISTRATION DOCUMENT
(SCHEDULE)
(Page numbering refers to the page contained in the relevant document)
Item #
Item contents
Chapter/Exhibit
Page/Section
1.
PERSONS RESPONSIBLE
1.1.
All persons responsible for the information given in
the prospectus
Prospectus
4 (Company
Representative
for Prospectus)
1.2.
A declaration by those responsible for the prospectus
Prospectus
4 (Company
Representative
for Prospectus)
2.
STATUTORY AUDITORS
Part II - Section B
65 (11.2
Independent
Registered Public
Accounting Firm)
Not applicable
Not applicable
2.1.
Name and address of the issuer’s auditors
2.2.
If auditors have resigned, been removed or not been
re-appointed during the period covered by the
historical financial information, indicate details if
material.
3.
SELECTED FINANCIAL INFORMATION
3.1.
Selected historical financial information
Part II - Section B
63-65 (11.1
Selected
Financial Data)
3.2.
Interim periods
Part II - Section B
63-65 (11.1
Selected
Financial Data)
4.
RISK FACTORS
Part II - Section A
19-31 (Risk
Factors)
5.
INFORMATION ABOUT THE ISSUER
5.1.
History and Development of the Issuer
5.1.1.
The legal and commercial name of the Issuer;
Part I - Section B
5 (B.1 Legal and
3714744-v9\
i
Item #
Item contents
Chapter/Exhibit
Page/Section
Commercial
Name of the
Issuer)
12.
TREND INFORMATION
12.1.
Significant trends that affected production, sales and
inventory, and costs and selling prices since the end
of the last financial year to the date of the
prospectus.
12.2.
Trends, uncertainties or events that are likely to
affect the issuer for at least the current financial year.
13.
PROFIT FORECASTS OR ESTIMATES
14.
ADMINISTRATIVE,
SUPERVISORY
BODIES
MANAGEMENT
Exhibit III
All pages
Part II - Section A
19-31 (Risk
Factors)
Exhibit III
All pages
Not applicable
Not applicable
MANAGEMENT,
AND
SENIOR
Names, business addresses and functions in the
issuer of the following persons and an indication of
the principal activities performed by them outside the
issuer where these are significant with respect to that
issuer:
48-52 (8.1 Board
of Directors as of
May 19, 2016)
and
Part II - Section B
59-60 (9.1
Directors’ and
Executive
Officers’ Holdings
of Shares and
Options)
b) partners with unlimited liability, in the case of a
limited partnership with a Share capital; (not
applicable)
Not applicable
Not applicable
c) founders, if the issuer has been established for
fewer than five years; and (not applicable)
Not applicable
Not applicable
a) members of the administrative, management or
supervisory bodies;
14.1
d) any senior manager who is relevant to establishing
that the issuer has the appropriate expertise and
experience for the management of the issuer’s
business.
3714744-v9\
ii
Part II - Section B
52-53 (8.2
Executive
Officers as of
June 1, 2016)
and
59-60 (9.1
Directors’ and
Executive
of Shares and
Item #
Item contents
Chapter/Exhibit
Page/Section
Options)
The nature of any family relationship between any of
those persons.
Part II - Section B
In the case of each member of the administrative,
management or supervisory bodies of the issuer and
each person mentioned in points (b) and (d) of the
first subparagraph, details of that person’s relevant
management expertise and experience and the
following information:
(a) the nature of all companies and partnerships of
which such person has been a member of the
administrative, management and supervisory bodies
or partner at any time in the previous five years,
indicating whether or not the individual is still a
member of the administrative, management or
supervisory bodies or partner. It is not necessary to
list all the subsidiaries of an issuer of which the
person is also a member of the administrative,
management or supervisory bodies or partner. It is
not necessary to list all the subsidiaries of an issuer
of which the person is also a member of the
administrative, management or supervisory bodies.
53 (8.3
Fraudulent
Offences and
Bankruptcy, Etc.)
48-52 (8.1 Board
of Directors as of
May 19, 2016)
and
Part II - Section B
52-53 (8.2
Executive
Officers as of
June 1, 2016)
(b) any convictions in relation to fraudulent offenses
for at least the previous five years;
(c) details of any bankruptcies, receiverships or
liquidations with which a person described in (a) and
(d) of the first subparagraph who was acting in the
capacity of any of the positions set out in (a) and (d)
of the first subparagraph was associated for at least
the previous five years;
(d) details of any official public incrimination and/or
sanctions of such person by statutory or regulatory
authorities (including designated professional bodies)
and whether such person has ever been disqualified
by a court from acting as a member of the
administrative, management or supervisory bodies of
an issuer or from acting in the management or
conduct of the affairs of any issuer for at least the
previous five years.
If there is no such information to be disclosed, a
statement to that effect is to be made.
3714744-v9\
iii
Part II - Section B
53 (8.3
Fraudulent
Offences and
Bankruptcy, Etc.)
Item #
Item contents
Chapter/Exhibit
Page/Section
14.2.
Administrative, management, and supervisory bodies
and senior management conflicts of interests.
Part II - Section B
53-59 (8.4
Conflicts of
Interest)
17.
EMPLOYEES
Part II - Section B
59-60 (9.1
Directors’ and
Executive
of Shares and
Options)
17.2.
Shareholdings and stock options with respect to each
person referred to in points (a) and (d) of the first
subparagraph of item 14.1.
Exhibits I and II
17.3
Description of any arrangements for involving the
employees in the capital of the issuer.
20.7.
Dividend policy
20.7.1
The amount of the dividend per Share for each
financial year for the period covered by the historical
financial information
All sections
Part I - Section E
14-17 (E.3
Description of the
terms and
conditions of the
offer)
Part II - Section B
60-63 (9.2
Employee Equity
Incentive Plans)
Part II - Section B
37 (Dividend
Rights)
Part II - Section B
43-47 (6.3
Indirect and
Contingent
Indebtedness)
Not applicable
Not applicable
20.8.
Legal and arbitration proceedings
20.9.
Significant change in the issuer’s financial or trading
position
23.
THIRD PARTY INFORMATION AND STATEMENT
BY EXPERTS AND DECLARATIONS OF ANY
INTEREST
23.1.
Where a statement or report attributed to a person as
an expert is included in the Registration Document,
provide such person’s name, business address,
qualifications and material interest if any in the
issuer.
Not applicable
Not applicable
23.2.
Where information has been sourced from a third
party, provide a confirmation that this information has
been accurately reproduced.
Not applicable
Not applicable
3714744-v9\
iv
Item #
Item contents
Chapter/Exhibit
Page/Section
24.
DOCUMENTS ON DISPLAY
Part II - Section B
65-66 (XII.
Documents on
Display)
3714744-v9\
v
ANNEX III
MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE SECURITIES NOTE (SCHEDULE)
(Page numbering refers to the page contained in the relevant document)
Item #
Item contents
1.
PERSONS RESPONSIBLE
1.1.
Chapter/Exhibit
Page/Section
All persons responsible for the information given in
the prospectus.
Prospectus
4 (Company
Representative
for Prospectus)
1.2.
A declaration
prospectus.
Prospectus
4 (Company
Representative
for Prospectus)
2.
RISK FACTORS
Part II - Section A
19-31 (Risk
Factors)
3.
KEY INFORMATION
3.1
Working capital statement
Part II - Section B
63 (X. Working
Capital
Statement)
Part II - Section B
42-47 (VI.
Statement of
Capitalization
and
Indebtedness as
of April 2, 2016)
3.2
by
those
responsible
for
the
Capitalization and indebtedness
31 (1.1 Purpose
of the SPP) and
Part II - Section B
41 (5.1 Purpose
of the Irish Plans)
3.4
Reasons for the offer and use of proceeds
4.
INFORMATION CONCERNING THE SECURITIES
TO BE OFFERED/ ADMITTED TO TRADING
4.1
Type and the class of the securities being offered,
including the security identification code.
3714744-v9\
vi
Exhibit I
Section 1
(Purpose)
Exhibit II
Section 1.
(Introduction)
Part II - Section B
36 (4.1 Type and
the Class of the
Securities Being
Item #
Item contents
Chapter/Exhibit
Page/Section
Offered, Including
the Security
Identification
Code)
4.2
Exhibit I
Section 7 (Stock)
Part II - Section B
36 (4.2
Legislation Under
Which the
Securities Have
Been Created )
Legislation under which the securities have been
created.
Exhibit I
Section 17
(Securities Laws
Requirements)
and
Section 20
(Governing Law)
4.3
Form of securities, name and address of the entity in
charge of keeping the records.
Part II - Section B
36-37 (4.3 Form
of Securities,
Name and
Address of the
Entity in Charge
of Keeping the
Records) and
42 (5.4 Trustee
and Delivery of
Shares)
4.4
Currency of the securities issue.
Part II - Section B
37 (4.4 Currency
of the Securities
Issue)
4.5
Rights attached to the securities
Part II - Section B
37-40 (4.5 Rights
attached to the
Securities)
Section 17
(Securities Laws
Requirements)
4.6
Statement of the resolutions, authorizations and
approvals by virtue of which the securities have been
or will be created and/or issued.
Exhibit I
Section 18
(Governmental
Regulations) and
Section 21
(Effective Date)
3714744-v9\
vii
Item #
Item contents
Chapter/Exhibit
Page/Section
Part II - Section B
31-32 (1.2
Shares Offered
under the SPP)
32 (1.3
Subscription
Period),
4.7
Expected issue date of the securities.
Part II - Section B
35-36 (III.
Delivery and Sale
of the Shares)
and
42 (5.4 Trustee
and Delivery of
Shares)
40 (4.6
Transferability)
and
Part II - Section B
42 (5.4 Trustee
and Delivery of
Shares)
4.8
Description of any restrictions
transferability of the securities.
on
the
Section 9
(Purchase of
Stock)
free
Exhibit I
Section 13
(Transferability)
and
Section 23
(Designation of
Beneficiary for
Owned Shares)
Exhibit II
Section 7 (Selling
the Shares)
4.9
Mandatory takeover bids and/or squeeze-out and
sell-out rules in relation to the securities.
Part II - Section B
40-41 (4.7
General
Provisions
Applying to
Business
Combinations)
4.11
Information on taxes on the income from the
securities withheld at source
Part II - Section B
66-77 (XIII. Tax
Consequences)
3714744-v9\
viii
Item #
Item contents
5.
TERMS AND CONDITIONS OF THE OFFER
5.1
Conditions, offer statistics, expected timetable
and action required to apply for the offer
Chapter/Exhibit
Part II - Section B
5.1.1
Conditions to which the offer is subject.
Page/Section
31-33 (I. The
Outline, II.
Eligibility and III.
Delivery and Sale
of the Shares)
and
41-42 (V. The
Irish Plans)
Exhibits I and II
All sections
31-32(1.2 Shares
Offered under the
SPP),
5.1.2
Total amount of the issue/offer.
Part II - Section B
41-42 (5.3
Participation in
the Irish Plans)
and
48 (7.2 Net
Proceeds)
Part II - Section B
33-34 (2.2
Participation of
Eligible
Employees) and
41-42 (V. The
Irish Plans)
Section 3
(Eligibility)
5.1.3
Time period during which the offer will be open and
description of the application process.
Exhibit I
Section 4
(Subscription
Periods) and
Section 14
(Amendment or
Termination of
the Plan)
Exhibit II
3714744-v9\
ix
Section 6
(Important Plan
Dates
Item #
Item contents
Chapter/Exhibit
Page/Section
2011/2012)
Part II - Section B
33 (1.7
Termination or
Amendment of
the SPP)
Section 3
(Eligibility)
Section 6
(Termination of
Employment)
Section 7 (Stock)
5.1.4
Circumstances under which the offer may be revoked
or suspended and whether revocation can occur after
dealing has begun.
Exhibit I
Section 8
(Offering)
Section 14
(Amendment or
Termination of
the Plan) and
Section 17
(Securities Laws
Requirements)
5.1.5
Possibility to reduce subscriptions and the manner
for refunding excess amount paid by applicants.
Exhibit II
Section 11
(Termination or
Death)
Part II - Section B
35 (2.4
Discontinuance
of Participation of
Participants)
Exhibit I
Section 5
(Participation)
34-35 (2.3 Payroll
Deductions) and
Part II - Section B
5.1.6
Minimum and /or maximum amount of application.
41-42 (5.3
Participation in
the Irish Plans)
Section 5
(Participation)
Exhibit I
Section 7 (Stock)
and
3714744-v9\
x
Item #
Item contents
Chapter/Exhibit
Page/Section
Section 8
(Offering)
5.1.7
Period during
withdrawn.
which
an
application
may
Exhibit II
Section 4 (What
Income May Be
Invested)
Part II - Section B
35 (2.4
Discontinuance
of Participation of
Participants)
Exhibit I
Section 5
(Participation)
Exhibit II
Section 5 (Payroll
Rules)
be
31-32 (1.2
Shares Offered
Under the SPP to
1.5 Purchase of
Shares),
Part II - Section B
5.1.8
Method and time limits for paying up the securities
and for delivery of the securities.
41-42 (5.3
Participation in
the Irish Plans to
5.4 Trustee and
Delivery of
Shares)
Section 9
(Purchase of
Stock) and
Exhibit I
Section 10
(Payment and
Delivery)
5.3
5.3.1.
Exhibit II
Section 4 (What
Income May Be
Invested)
Part II - Section B
32 (1.4 Purchase
Price)
Exhibit I
Section 8(b)
(Offering)
Pricing
An indication of the price at which the securities will
be offered.
3714744-v9\
xi
Item #
Item contents
Chapter/Exhibit
Page/Section
Exhibit II
Section 4 (What
Income May Be
Invested)
Part II - Section B
36-37 (4.3 Form
of Securities,
Name and
Address of the
Entity in Charge
of Keeping the
Records )
Exhibit I
Section 8
(Offering)
Exhibit II
Section 9
(Regular
Communications)
5.3.3.
If the issuer’s equity holders have pre-emptive
purchase rights and this right is restricted or
withdrawn.
Part II - Section B
40 (No
Preemptive,
Redemptive or
Conversion
Provisions)
5.3.4
Where there is or could be a material disparity
between the public offer price and the effective cash
cost to members of the administrative, management
or supervisory bodies or senior management, or
affiliated persons, of securities acquired by them in
transactions during the past year.
Not applicable
Not applicable
5.4.
Placing and Underwriting
Part II - Section B
36-37 (4.3 Form
of Securities,
Name and
Address of the
Entity in Charge
of Keeping the
Records)
Part II - Section B
36 (4.1 Type and
the Class of the
Securities Being
Offered, Including
the Security
Identification
5.3.2.
Process for the disclosure of the offer price.
5.4.2
Name and address of any paying agents and
depository agents in each country.
6.
ADMISSION TO
ARRANGEMENTS
6.1
TRADING
AND
DEALING
Whether the securities offered are or will be the
object of an application for admission to trading.
3714744-v9\
xii
Item #
Item contents
Chapter/Exhibit
Page/Section
Code)
Part II - Section B
36 (4.1 Type and
the Class of the
Securities Being
Offered, Including
the Security
Identification
Code)
Part II - Section B
48 (7.2 Net
Proceeds)
The amount and percentage of immediate dilution
resulting from the offer.
Part II - Section B
47-48 (7.1
Maximum
Dilution)
9.2.
In the case of a subscription offer to existing equity
holders, the amount and percentage of immediate
dilution if they do not subscribe to the new offer.
Not applicable
Not applicable
10.
ADDITIONAL INFORMATION
10.1.
If advisors connected with an issue are mentioned in
the Securities Note, a statement of the capacity in
which the advisors have acted.
Not applicable
Not applicable
10.3.
Where a statement or report attributed to a person as
an expert is included in the Securities Note, provide
such persons’ name, business address, qualifications
and material interest if any in the issuer.
Not applicable
Not applicable
10.4.
Where information has been sourced from a third
party.
Not applicable
Not applicable
6.2
Regulated markets or equivalent markets on which
securities of the same class of the securities to be
offered or admitted to trading are already admitted to
trading.
8.
EXPENSE OF THE ISSUE/OFFER
8.1.
The total net proceeds and an estimate of the total
expenses of the issue/offer.
9.
DILUTION
9.1.
3714744-v9\
xiii

Intel Corporation 2200 Mission College Boulevard

Transcription

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